What is supervised supply, observation, and monitoring under VAT rules?

The Commissioner may form teams of officers and employees to perform supervised supply, observation, and monitoring based on risk management. Teams inspect sites (Form Mushak-13.1), issue supply invoices, and report daily (Form Mushak-13.2) and at the end of the period (Form Mushak-13.3).

How are auditors appointed for special audits?

The Board appoints auditors in accordance with the Public Procurement Act, 2006, and Public Procurement Rules, 2008. Tender documents specify number of organizations, audit duration, terms of reference, applicable guidelines, standards, submission timeframe, and penalties for non-compliance.

What acts by auditors are considered punishable under VAT rules?

Punishable acts include failure to perform duties, harming government revenue, submitting false or misleading reports, not providing information, not following guidelines or standards, aiding tax evasion, providing false tender information, partial execution of work, late report submission, or violating laws and tender conditions.

What are the penalties for auditors committing offenses?

If tax evasion occurs, auditors are fined at least double the evaded tax, their contract is terminated, and they are blacklisted (5 years for first offense, life for second). If no tax evasion occurs, the fine is at least BDT 3,00,000, with contract termination and blacklisting under the same rules. Penalties follow show-cause notice and personal hearing as per Rule 65.

Value Added Tax and Supplementary Duty Rules, 2016 Notes-P12

Chapter 13: Audit and Investigation

66. Supervised Supply, Observation, and Monitoring

Based on risk management, the Commissioner may form one or more teams by order, consisting of one or more officers and employees, for supervised supply, observation, and monitoring.
The order shall specify the location, time, and duration of supervised supply.
Before starting supervised supply, the team shall inspect the supply site and submit a report to the Commissioner in Form "Mushak-13.1".
The team shall be present full-time at the specified location and perform all VAT-related activities including issuance of supply invoices. Daily activities shall be reported in Form "Mushak-13.2" by the next day, and a final report at the end of the supervised supply period in Form "Mushak-13.3" shall be submitted to the Commissioner.

67. Appointment of Auditors for Special Audit

The Board may appoint auditors following the provisions of subsequent rules.
Appointment of auditors must comply with the Public Procurement Act, 2006 and the Public Procurement Rules, 2008.
The tender document for auditor appointment shall specify:
- Number of organizations selected for audit;
- Duration of the audit;
- Terms of reference for the auditor;
- Applicable audit guidelines;
- Standards to follow during audit;
- Timeframe for submission of audit report;
- Penalties for non-compliance.
The following acts by appointed auditors shall be considered punishable offenses:
- Failure to perform assigned duties properly;
- Causing harm to government revenue;
- Submitting false or misleading reports;
- Failure to provide information as requested by the Board;
- Failure to follow audit guidelines;
- Failure to follow audit standards;
- Engaging in tax evasion or aiding others in tax evasion;
- Providing false/misleading information in tender documents;
- Reluctance or partial execution of assigned work after appointment;
- Failure to submit reports within the specified time;
- Violation of laws, rules, or tender conditions.
Consequences for auditors committing offenses:
1. If tax evasion occurs:
  1. Auditor shall be fined at least double the evaded tax amount;
  2. Contract shall be terminated;
  3. Blacklisted permanently for 5 years for first offense and for life for second offense.
2. If no tax evasion occurs:
  1. Auditor shall be fined at least BDT 3,00,000;
  2. Contract shall be terminated;
  3. Blacklisted permanently for 5 years for first offense and for life for second offense.
Imposition of penalties shall follow the procedure of show-cause notice and personal hearing as per Rule 65.
The provisions of sub-rule (5) shall be in addition to the relevant provisions of the Public Procurement Act, 2006 and the Public Procurement Rules, 2008.