What is VAT deducted at source?
VAT deducted at source is VAT withheld by the buyer from a supplier payment and deposited with the government directly. The supplier receives a Mushak 6.6 certificate for the amount withheld.
VAT deducted at source is VAT withheld by the buyer from a supplier payment and deposited with the government directly. The supplier receives a Mushak 6.6 certificate for the amount withheld.
In Bangladesh
Government bodies, banks, NGOs and larger companies commonly withhold, so suppliers to those buyers routinely receive less cash than the invoice total and spend the start of each month collecting certificates.
An example
An agency invoices a bank BDT 200,000 plus BDT 30,000 VAT. The bank pays BDT 200,000, deposits the BDT 30,000 to the treasury and issues a Mushak 6.6. The agency's books must show the invoice settled in full, not BDT 30,000 outstanding.
In SORS ERP
The deduction is recorded against the invoice through tax structures and account mapping in SORS ERP, so the receivable reduces by the amount withheld and the ledger shows VAT accounted for rather than an unexplained short payment.
Also called
- In Bangla
- উৎসে মূসক কর্তন
- Also
- VDS
- Also
- withholding VAT
Questions
Answered plainly, including where the answer is no.
What if the certificate never arrives?
Chase it, because it is the evidence that the VAT was accounted for. Recording the deduction against the invoice in your books keeps the receivable correct in the meantime, but the certificate is what supports the position.
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