VAT and Turnover Tax Registration Cancellation Process

As Per Bangladesh Gazette, Extra, November 3, 2016

Section 8: VAT Registration Cancellation

Who can apply for cancellation:

A registered person can apply for cancellation of VAT registration using Form "Mushak-2.4" to the Commissioner if:

1. They fail to start economic activities after registration
2. They have closed their economic activities
3. Their economic activity has been declared suspended
4. Their annual turnover remains below the registration threshold for two consecutive years

Commissioner's action on application:

After investigation, the Commissioner may:

• Temporarily suspend registration if reasons seem valid, and inform the applicant
• Take other appropriate decisions if reasons don't seem valid or application is incomplete

Next steps after temporary suspension:

Within 15 days of temporary suspension, the registered person must:

1. Complete all activities under section 9(6)
2. Submit a final return using Form "Mushak-2.5"

Final cancellation:

Within 15 days of receiving the final return, after verification, the Commissioner will cancel the registration.

Special case:

If turnover is below VAT registration threshold but above turnover tax threshold, the Commissioner may cancel VAT registration and enroll the person for turnover tax.

Commissioner's initiative:

The Commissioner can cancel registration after proper inquiry and giving reasonable opportunity of hearing if convinced that the person no longer needs to be registered as a VAT taxpayer.

Post-cancellation liabilities:

Even after cancellation, if any dues or offenses are discovered, the person will be treated as a registered person for relevant legal provisions.

Section 9: Turnover Tax Enrollment Cancellation

Application for cancellation:

Can apply for cancellation using Form "Mushak-2.4" to the Commissioner under section 11(1).

Commissioner's action:

Similar to VAT registration cancellation process - may temporarily suspend enrollment after investigation.

After temporary suspension:

The enrolled person must:

1. Immediately stop all turnover tax related activities
2. Return the enrollment certificate and all certified copies to the Commissioner within 15 days
3. Pay any outstanding tax
4. Submit a final return using Form "Mushak-2.5"

Final cancellation:

Within 15 days of receiving the final return, after verification, the Commissioner will cancel the enrollment.

Commissioner's power:

The Commissioner can cancel enrollment after proper inquiry and hearing if convinced that the person no longer needs to be enrolled as a turnover taxpayer.

Upgrading to VAT registration:

If annual turnover exceeds VAT threshold, Commissioner may cancel turnover tax enrollment and register the person for VAT after giving hearing opportunity.

Post-cancellation liabilities:

Similar to VAT - even after cancellation, if any dues or offenses are discovered, the person will be treated as an enrolled person.

Summary of Forms to Use:

• Form Mushak-2.4: Application for cancellation of VAT registration or turnover tax enrollment
• Form Mushak-2.5: Final return to be submitted after temporary suspension