[Home] [Databases] [WorldLII] [Search] [Feedback] Bangladesh Acts

You are here:  CommonLII >> Databases >> Bangladesh Acts >> Finance Act, 1987

[Database Search] [Name Search] [Noteup] [Help]

Finance Act, 1987

The following Act of Parliament received the assent of the President on the 30th June, 1987 (15th Ashar, 1394) and is hereby published for general information:-

An Act made to give effect to financial proposals of the Government and to amend certain Laws
Whereas it is expedient to give effect to financial proposals of the Government and to amend certain Laws, for the purposes appearing hereinafter;

Now,therefore, it is herewith enacted as follows:-

1. Short title and commencement.- (1) This Act may be called the Finance Act, 1987.
(2) Subject to the Provisional Collection of Taxes Act, 1931 (XVI of 1931) and the declaration issued thereunder,-

(a) this Act, excepting section 6, shall have effect from the 1st July, 1987;
(b) section 6 of this Act shall have effect from the 1st Vaishakh, 1394.

3. Amendment of Ben.Act I of 1932.- For the FIRST SCHEDULE of the Motor Vehicle Tax Act, 1932 (Ben.Act I 1932) the SCHEDULE stated in the SECOND SCHEDULE of this Act shall be substituted.

4. Amendment of Act I of 1944.- The FIRST SCHEDULE of the Excises and Salt Act, 1944 (I of 1944) shall be amended such as stated in the FIRST SCHEDULE of this Act.

5. Amendment of Act IV of 1969.- In the Customs Act, 1969 (IV of 1969),-

(1) in section 21, after the words "the Board" the words "or any other authority authorised by the Board in writing in this behalf" shall be inserted".
(2) in section 25(1), for the words and number "at the time the bill of entry is delivered under section 79" the words and number "on the date referred to in section 30" shall be substituted.
(3) in section 30,-

(a) for the existing marginal note the following marginal note shall be substituted, namely:-
"Date for the determination of value and rate of import.-"; and
(b) for sub-section (1) the following sub-section (1) shall be substituted, namely:-
"(1) The value of, and the rate of duty applicable to, any imported goods shall be the value and the rate of duty in force,-

(a) in the case of goods cleared for home-consumption under section 79, on the date on which a bill of entry is presented under this section;
(b) in the case of goods cleared from a warehouse for home-consumption under section 104, on the date on which the goods are actually removed from the warehouse; and
(c) in the case of any other goods, on the date of payment of duty:
Provided that if a bill of entry is presented in anticipation of arrival of a conveyance by which the goods are imported, the relevant date for the purpose of this section shall be the date on which the manifest of the conveyance is delivered after its arrival.".

(4) section 82 shall be renumbered as its sub-section (1) and after the so renumbered sub-section (1) the following sub-section (2) shall be added, namely:-
"(2) Where any goods are sold under sub-section (1) pending adjudication, appeal, revision or decision of a court, the proceeds of such sale shall be deposited into the Government treasury; and, if on such adjudication or in such appeal or revision it is found or if the court finds that the goods so sold are not liable to confiscation, the proceeds of the sale shall, after necessary deduction of duties, taxes or dues as provided in section 201, be refunded to the owner.".
(5) after section 196 the following section 196B shall be inserted, namely:-
"196B. Power of the Government to call for and examine records.- The Government may, on its own motion or on an application made by any person, within one year of the passing of an order under this Act or the rules made thereunder, call for and examine the records of the proceedings relating to such order for the purpose of satisfying itself as to the legality or propriety of the order and may pass such order as it thinks fit, rectifying any mistake or error which becomes apparent from such examination:
Provided that no such order which has the effect of confiscating goods of greater value or, enhancing any fine in lieu of confiscation or enhancing any penalty or requiring the payment of a greater amount of duty shall be made unless the person affected by such order has been given an opportunity of being heard in person or through a counsel or other person duly authorised by him.".
and
(6) in column (1) of the FIRST SCHEDULE, in column (3) opposing Tariff Heading No.24.02B, for the number 400 the number 300 shall be substituted.

(1) in section 3,-

(a) in sub-section (1), for clause (a) the following clause (a) shall be substituted, namely:-
"(a) if total agricultural
land held by the family
or body-

(i) does not exceed 200 acres.	Three poisha per decimal, subject to a minimum of one taka;
(ii) exceeds 200 acres, but does not exceed 500 acres.	Thirty poisha per decimal;
(iii)exceeds 500 acres, but does not exceed 10000 acres.	Fifty poisha per decimal;
(iv) exceeds 10000 acres.	Two taka per decimal.".

(b) the existing sub-section (3A) shall be renumbered as sub-section (3B) and before the so renumbered sub-section (3B) the following sub-section (3A) shall be inserted, namely:-
"(3A) For the purpose of sub-section (1) (a), the total land held by a family or body in each Upazila shall be taken separately and the land development tax shall be assessed thereon, as if it were the total land held by the family or body.".

(2) in section 3B, for sub-section (1) the following sub-section (1) shall be substituted, namely:-
"(1) The head of every family or body shall submit to the Upazila Revenue Officer, in such form and manner as may be prescribed and within such time as may be specified by such Officer, a statement of all land held by such family or body in that Upazila, indcating therein the amount and nature of such land, on the first day of the year to which the statement relates.".

(1) in sub-section (1) and sub-section (1A) the words, brackets, numbers and comma "Subject to the provisions of sub-section (2)" shall be omitted; and
(2) sub-section (2) shall be omitted.

(1) in clause (19) of section 2, after the word and number "section 3" the comma and words "and includes a Senior Commissioner of Taxes" shall be added;
(2) in section 29, after clause (xviii) of sub-section (1) the following new clause (xviiia) shall be inserted, namely:-
"(xviiia) in respect of provision for bad and doubtful debt made by Bangladesh Shilpa Rin Sangstha for overdue loan, a sum equal to five per cent, of such overdue loan or the amount of actual provision for such bad or doubtful debt in the books of the assessee, whichever is less:
Provided that in the deduction shall be allowed only in respect of the assessment years 1987-88, 1988-89, 1989-90 and 1990-91:
Provided further that if any amount out of the amount so allowed is ultimately recovered, the same shall be deemed to be a profit of the year in which it is recovered;";
(3) in section 44(3), for the nubers, words and brackets "1 to 11 (both inclusive)" the numbers, words and brackets "1 to 14 (both inclusive) and 17" shall be substituted.
(4) in section 75(2), for the words "eighty thousand taka" the words "one lakh taka" shall be substituted.
(5) after section 173 the following new section 173A shall be inserted, namely:-
173A. Place of assessment.- (1) Where an assessee carries on a business, profession or vocation at any place, he shall be assessed by the Deputy Commissioner of Taxes of the area in which that place is situate or, where the business, profession or vocation is carried on in more places than one, by the Deputy Commissioner of Taxes of the area in which the principal place of his business, profession or vocation is situate.
(2) In all other case, an assessee shall be assessed by the Deputy Commissioner of Taxes of the area in which he reisides.
(3) Where any question arises under this section asa to the place of assessment, such question shall be determined by the Commissioner, or, where the question is between places in areas within the jurisdiction of more Commissioners than one, by the Commissioners concerned, or, if they are not in agreement, by the National Board of Revenue:
Provided that, before any such question is determined, the assessee shall have had opportunity of representing his views.
(4) No person shall be entitled to call in question the jurisdiction of a Deputy Commissioner of Taxes after he has made the return of total income or where he has not made such return, after the time allowed by the notice served on him for making such return has expired.".
(6) in section 184(1), the words "valued at more than one lakh taka" shall be omitted.
(7) in PART B of the FIRST SCHEDULE, in paragraph 1(f), after the semi-colon of sub-clause (ii), the word "or" shall be added and thereafter the following new sub-clause (iii) shall be added, namely:-
"(iii) any diplomatic, consular or trade mission or office of any intergovernmental organisation located in Bangladesh, maintaining a provident fund for the benefit of Bangladeshi employees of such mission or office.".
(8) in the THIRD SCHEDULE,-
(a) in paragraph 1, for the existing TABLE the following TABLE shall be substituted, namely:-

TABLE

 
 

Serial No.	Classification of irrigation or protective work or other assets	Rate/percentage of the written down value except as otherwise indicated	Remarks
1	Pucca buildings	10
2	Kutcha and Pucca buildings	15
3	Kutcha buildings	20
4	Temporary structure		No rate is specified; renewal will be allowed as revenue expenditure
5	Pucca walls	5
6	Fencing of substantial material	10
7	Tube well	15
8	Tanks	10
9	Pucca irrigation channel	15
10	Kutcha irrigation channel	20
11	Kutcha irrigation wells	33.3
12	Pucca irrigation wells	5
13	Bullock-drawn iron implements	15
14	Bullock-drawn wooden or leather implements and other small hand implements	25
15	Weighing machine	10
16	Tractors and oil engines and thin implements	15
17	Power pumping machinery	20
18	Factory-made iron cart with rubber tyre	15
19	Country cart	20
20	Steam engine	10
21	Workshop tools	15
22	General (machinery, implements, plants and other assets) not specifically provided for above	10

(b) in paragraph 7(1), for the number "1987" the number "1990" shall be substituted.
(c) in paragraph 8(1), in clause (a) and clause (b), in both places for the number "1987" the number "1990" shall be substituted.
(d) in paragraph 11,-

(1) in the proviso of sub-paragraph (3), for the words "two lakh fifty thousand taka", mentioned in two places, in both places the words "three lakh taka" shall be substituted;
(2) in sub-paragraph (6) (a), for the words "two lakh fifty thousand taka" the words "three lakh taka" shall be substituted;

(9) in the SIXTH SCHEDULE,-

(a) in PART A, for paragraph 22 the following paragraph 22 shall be substituted, namely:-
"22. (1) Any income from dividend received by an assessee (other than a company) out of investments made in a public limited company.
(2) The exemption under sub-paragraph (1) shall also be available to the shareholders of a private limited company provided such private limited company is converted into a public limited company within a period of two years commencing on the 1st day of July, 1987.
Explanation.- In this paragraph, "public limited company" includes a company in which no less than fifty per cent. of the shares are held by the Government.";
(b) in PART B, in paragraph 18,-

(1) in clause (a), for the words "three thousand four hundred" the words "three thousand" shall be substituted;
(2) in clause (b), for the words "three thousand and two hundred" the words "three thousand and eight hundred" shall be substituted; and
(3) in clause (c), for the words "six thousand" the words "six thousand and six hundred" shall be substituted;

Provided that "exported from Bangladesh", "goods exported into foreign countries" and "proceeds of export" as used in this clause shall also include locally manufactured ready-made implements, equipments and other ready-made articles made in the country if they are sold to any institution under a programme to collect their foreign currency quota.
(b) The provisions stated in clause (a) shall not be applicable in case of the following goods or classes of goods, namely:-
(1) tea;
(2) raw jute;
(3) articles etc. made of jute;
(4) raw hide and wet-blue hide;
(5) The Board of Revenue may from time to time by notification include in this list any other such articles.
(c) The Board of Revenue may, for the purpose of assessing the profit arisen out of proceeds of export and determining the income tax to be imposed thereupon and for giving effect to the provisions of this sub-section, make rules for all necessary matters.
(5) Where the total proceeds of any taxpayer other than a taxpayer not registrated in Bangladesh in the tax year commencing on 1th July, 1987, includes profits from passenger buses or passenger launches, the income tax imposable on the profits of the buses or launches shall be levied with a reduction of 50 per cent.
(6) In all cases in which the SECOND SCHEDULE of the Income Tax Ordinance, 1984 (XXXVI of 1984) is applicable payable tax shall be levied in accordance with such SCHEDULE, but in the case of determining the rate of tax the provisions of sub-section (1) or, if applicable, of sub-section (2) shall be applied.
(7) The rates of tax determined in the FOURTH SCHEDULE for reduction of tax in accordance with Chapter VII of the Income Tax Ordinance, 1984(XXXVI of 1984) shall be applicable in the year commencing on 1th July, 1987 and ending on 30th June, 1988.
(8) The expression "total income" used in this section and for the purpose of (determining) the rate of tax imposed under this section shall mean "total income" as defined in accordance with the provisions of the Income Tax Ordinance, 1984 (XXXVI of 1984).
--------------------------------------------------------------------------

 
 

(1) Letters
for every ten grammes or fraction thereof	1.00 Tk
(2) Postcards
single	50 Poisha
reply	1.00 Tk
(3) Business Reply Envelopes
for every ten grammes or fraction thereof	1.00 Tk
(4) Business Reply Cards	50 Poisha
(5) Book Packets including Printed Matters
for the first 50 grammes or fraction thereof	1.00 Tk
for every additiuonal 25 grammes or fraction thereof in excess of 50 grammes	25 Poisha
(6) Pattern and Sample Packets
for the first 50 grammes or fraction thereof	1.00 Tk
for every additional 25 grammes or fraction thereof in excess of 50 grammes	50 Poisha
(7) Registered Newspapers (single copy)
for a weight not exceeding 100 grammes	15 Poisha
for a weight exceeding 100 grammes but not exceeeding 200 grammes	30 Poisha
for every additional 200 grammes or fraction thereof	15 Poisha
(8) Registered Newspaper Packets (more than one copy of the same issue)
for a weight not exceeding 100 grammes	15 Poisha
for every additional 50 grammes or fraction thereof in excess of 100 grammes	15 Poisha
(9) Blind Literature Packets (not exceeding eight kilogrammes or any lower limit that may be prescribed by the Director-General)	free
(10) Parcels
for every 400 grammes or fraction thereof	4.00 Tk
(11) Air Parcels
for every 400 grammes or fraction thereof	5.00 Tk
(12) Aerogramme (Inland)	1.00 Tk

In the Excise and Salt Act, 1944 (I of 1944), in the FIRST SCHEDULE, in PART I,-
(1) in SECTION I, for the word "three" in column 3 opposite Item N.0103 of column 1 the word "five" shall be substituted;
(2) in SECTION II, for the entries of column 2 and 3 opposite Item N.0201 of column 1 the following entries shall be substituted, namely:-
 

Bread and Biscuits
(a) Biscuits
(1) if weight and retail price are legibly, prominently and indelibly printed on each packet or container or embossed on the body of the biscuits,	15 per cent of the retail price.
(2) if not covered by sub-item (1),	200 per cent [ad valorem].
(b) Bread
(1) if weight and retail price are legibly, prominently and indelibly printed on each packet, label or outer wrapper of bread,	15 per cent of the retail price.
(2) if not covered by sub-item (1),	200 per cent ad valorem.

(3) in SECTION V,-
(a) after entry (vi) under the goods stated in serial No. (1) in column 2 and the entry relating thereto in column 3 opposite Item No.0501 of column 2 the following entries shall be added, namely:-
 

(VII) Plastic Containers of all sorts

30 per cent ad valorem.

(b) for the full stop at the end of entry (5) under the title "Explanation" in column 2 opposite Item No.0501 of column 2 a semi-colon shall be substituted and thereafter the following entry shall be added, namely:-

(6) "Plastic containers" means plastic containers ordinarily intended for packaging of goods and includes collapsible tubes, casks, drums, cans, and boxes made of plastic materials.

(4) in SECTION X,-
(a) for the entries of column 2 and 3 opposite Item No.10-02 of column 1 the following entries shall be substituted, namely:-
 

Metal Containers of all sorts

30 per cent ad valorem.

Explanation: "Metal containers" means metal containers ordinarily intended for packaging of goods and includes collapsible tubes, casks, drums, cans, boxes, gas cylinders made of metal, whether in assembled or unassembled condition;

(b) for the entries of columns 2 and 3 opposite Item No. 10-03 of column 1 the following entries shall be substituted, namely:
 

Mild Steel Products of all sorts
(I) corrugated iron sheets, all sorts,	10 per cent ad valorem.
(II) galvanized plain sheets, all sorts,	10 per cent ad valorem.
(III) mild steel rods, all sorts,	10 per cent ad valorem.
(IV) mild steel bars, coils, joists, girders, angles, channels, tees, flats, beams, zeds, trough, piling and all other rolled, forged, formed or extruded shapes and sections,	10 per cent ad valorem.

(b) for the entries of column 2 and 3 opposite Item No.10-03 of column 1 the following entries shall be substituted, namely:-
"Mild steel products, all sorts, namely:-

(5) in SECTION XI, for the entries of column 2 and 3 opposite Item No.11-06 of column 1 the following entries shall be substituted, namely:-
"Electrical goods, apparatus, appliances, equipments and fittings, whether in assembled or unassembled form, namely:-
 

(a) Air coolers	10 per cent ad valorem.
(b) Refrigerators, freezers and other refrigerating or freezing equipment	10 per cent ad valorem.
(c) Water heaters, geysers and immersion rods	10 per cent da valorem.
(d) Sockets, plug holders (all sorts), switches (other than mainswitches), bridges, chokes or ballasts and cut-outs (not exceeding 15 amperes)	10 per cent ad valorem.
(e) Brackets, calling bells, ceiling roses, lighting fittings and covers thereof	10 per cent ad valorem.

A. In the case of every taxpayer, joined hindu family, unregistered co-shared firm, group of persons and artificial person created by law mentioned in section 2(46) of the Income Tax Ordinance, 1984 (XXXVI of 1984)-in all cases in which section"B" is not applicable-
(1) on the first Taka 55.000 of taxable income...10%
(2) on the next Taka 55.000 of taxable income...20%
(3) on the next Taka 55.000 of taxable income...30%
(4) on the next Taka 55.000 of taxable income...40%
(5) on the remaining taxable income...50%
Provided that,-

(i) if the income (if any) before deduction from the total income of the tax exemption in accordance with to paragraph 1 to 14, 17, 18 and 20 of PART B of the SIXTH SCHEDULE of the Income Tax Ordinance, 1984 (XXXVI of 1984) does not exceed Taka 36.000, no income tax shall be payed on such total income.
(ii) the income tax to be payed shall under no circumstances exceed the following limits-
(1) one third of the total income above Taka 36.000, or
(2) 50 per cent. of the total income, whichever of the two is lesser. Where the total income includes the income, profits and gains of any registered firm on which paragraph 'C' of this SCHEDULE is applicable, the proportional income tax to be paid for the particular share to be received from the registered firm in accordance with paragraph 'C' shall be added to the income tax to be paid in accordance with this paragraph and if, after such addition, the amount of the tax exceeds 50% of the total income of the co-sharer of the registered firm, the income tax to be paid by them in accordance with this paragraph shall not exceed 50% of the total income:

Explanation- The expression "taxable income" used in this paragraph shall have the meaning of the definition of "taxable income" given section 2 (63) of the Income Tax Ordinance, 1984 (XXXVI of 1984).
B. Companies, local authorities and all taxpayers on whom income tax is imposed at the maximum rate in accordance with the Income Tax Ordinance, 1984 (XXXVI of 1984)-
 
 

(1) On all kinds of income other than dividend income from a company whose registered office  is in Bangladesh,	Rate
(I) in case of every industrial company which is a publicly traded company	40 per cent of the said income.
(II) in case of every industrial company which is not a publicly traded company	45 per cent of the said income.
(III) in the case of all kinds of companies including banks, money investing institutions and local authorities	55 per cent of the said income.
(IV) in the case of taxpayers included in any class of persons not being a bank, not residing in Bangladesh	30 per cent of the said income.

Provided that, if the income produced outside Bangladesh, on which section 9 (4) of this Act shall not be applicable, of any company registered under the Companies Act, 1913 (VII of 1913) is imported into Bangladesh, a reduction at a rate of 10% shall be allowed on this income:
Provided further that, if any company registered under the Companies Act, 1913 (VII of 1913) is engaged in the production of goods etc., it shall be allowed reduction at the rate stated below:-
 

	Amount
(1) where the volume of production of the year concerned exceeds the volume of production of the previous year by more than 15 but not more than 25 per cent,	2.5 per cent of the income tax applicable in respect of the said income.
(2) where the volume of production of the year concerned exceeds the volume of production of the previous year by more than 25 per cent,	5 per cent of the income tax applicable in respect of the said income.
(I) on income from declared and payed dividends on share-capital issued, promised and payed after August 14th, 1987 by any company registered in Bangladesh under the Companies Act (VII of 1913) or any corporate body regulated in accordance with laws of the National Parliament,	15 per cent of  the income tax applicable in respect of the said income.

Explanation.- 1:
The expression "industrial company" shall mean such companies as are mainly engaged in the following activities:-
(1) production and processing of goods etc.,
(2) construction of apparatuses, plants, machines etc. and all kinds of implements,
(3) ships or motor vehicles,
(4) search and exploitation of gas, oil or any other mineral resource:
Provided that the income, profits and gains, in any income year, of any industrial company from one or more of the activities stated above shall not be less than two third of the total income of this income year.
Explanation.- 2:
The expression "publicly traded company" shall mean such company as fulfils the following conditions:-
(1) it shall be a industrial company;
(2) the paid up capital of the company shall not be less than Taka 20,00,000;
(3) at least 50 per cent of the paid up capital of the company shall, at the end of an account year, be owned by owners other than the entrepreneurs and members of the manager circle of the company;
(4) the entrepreneurs and members of the manager circle shall not buy any shares in another's name;
(5) every shareholder shall on the average be in possession of Taka 20,000 of the paid up capital of the company;
(6) at least 10 per cent of the profits of the account year for which the tax shall be determined shall be declared dividends and distributed amongst the shareholders;
(7) the shares of the company shall, before the end of the account year for which the income tax shall be determined, be scheduled at the stock exchange;
Explanation.- 3:
In this section, "Less Developed Area" and "Least Developed Area" means all places specified in S.R.O. 411-L/85 and S.R.O. 412-L/85 of 22th September, 1985, of the National Revenue Board.
C. In the case of registered firms, income tax shall be levied at the following rates-
 

	Rate
(1) On the first Tk 36,000 of the total income	zero.
(2) on the next Tk 36,000 of the total income	10 per cent.
(3) on the next Tk 74,000 of the total income	15 per cent.
(4) on the next Tk 74,000 of the total income	20 per cent.
(5) on the remaining Takas of the total income	25 per cent.

Provided that, if the income, profits and gains of any registered firm are based on a profession and if the income, profits and gain of such firm depends completely or predominantly on the personal endeavour of its shareholders and if all these shareholders cannot, in the form of any body corporate with limited responsability, be registered as a company under the Companies Act, 1913 (VII of 1913) on account of any law for the time being in force or on account of the customs, rules or regulations of the association or institution which they are members of, such registered firm shall not pay any income tax unless the said profession is, completely or predominantly, of the nature to carry out contracts for any other group of persons or to give commercial advice to any other group of persons for carrying out contracts.
Explanation.- "Registered firm" as used in this section means registered firm under section 111 of the Income Tax Ordinance, 1984 (XXXVI of 1984).
Subject to the provisions of section 3 of the Provisional Collection of Taxes Act, 1931 (XVI of 1931), it is herewith declared that it is, in the public interest, expedient to give paragraph 4 and 5 of this bill immediate effect.