What is Exempt supply?
An exempt supply is one on which no VAT is charged and against which input tax rebate generally cannot be claimed. It is different from a zero rated supply, where the rate is nil but rebate may still be available.
An exempt supply is one on which no VAT is charged and against which input tax rebate generally cannot be claimed. It is different from a zero rated supply, where the rate is nil but rebate may still be available.
In Bangladesh
Certain essential goods, agricultural items and specified services are exempt, and the list is set by schedule and revised. A business selling a mix of exempt and taxable goods has to keep them apart in its records.
An example
A grocery shop sells both exempt staples and standard rated packaged goods in the same basket. Each line has to carry its own treatment, or the output tax figure for the month is wrong in a way nobody notices until an audit.
In SORS ERP
Exemptions are set per item through tax structures, so an exempt line and a standard rated line can sit on the same invoice and still reach the registers correctly.
Also called
- In Bangla
- অব্যাহতিপ্রাপ্ত সরবরাহ
Questions
Answered plainly, including where the answer is no.
What is the difference between exempt and zero rated?
Both mean no VAT is charged to the customer. The difference is rebate: a zero rated supply is still taxable, so input tax on the purchases behind it is generally recoverable, while an exempt supply generally leaves that VAT as a cost.
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