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What are exempted goods and services in Bangladesh?

Certain goods and services in Bangladesh are exempt from Value Added Tax (VAT). These exemptions are primarily outlined in the First Schedule of the Value Added Tax and Supplementary Duty Act 2012, and are also granted through Statutory Regulatory Orders (SROs) issued by the National Board of Revenue (NBR).

Here's a general look at the categories and some specific examples of goods and services that don't have VAT in Bangladesh:

Exempted Goods (as per the First Schedule and other notifications):

• Live animals: "Live animals, including horses, cows, pigs, sheep, goats, and poultry (with the exception of ornamental fish), are exempt from VAT."
• Agricultural Produce (in their natural state): Paddy, rice, wheat, maize, other grains, vegetables, fruits, pulses, oilseeds, raw cotton and jute, sugarcane.
• Fresh Food: "Fresh Food: Fresh and chilled meat from bovine animals, swine, sheep, goats, horses, etc., excluding wrapped or canned meat weighing up to 2.5kg."
• Fresh and chilled fish (excluding ornamental fish). Fresh milk and cream (not concentrated or sweetened, and not packaged in containers up to 2.5kg) are exempt from VAT.
• Unprocessed Natural Products: Human hair (unworked), pigs', hogs', or boars' bristles and hair (unworked), guts, bladders, and stomachs of animals (unprocessed), raw hides and skins.
• Live plants: including bulbs, tubers, roots, corms, crowns, and rhizomes (whether dormant or growing), as well as cuttings, slips, and mushroom spawn, are VAT-free.
• Certain Raw Materials and Intermediary Goods: Depending on specific SROs, certain raw materials and intermediary goods used in manufacturing, especially for export-oriented industries, may be exempt. Examples include gas and electricity for export-oriented industries and procurement providers' services for sourcing raw materials for export production.
• Capital Goods for EPCG License Holders: Supply of capital goods to entities holding an Export Promotion Capital Goods (EPCG) license may be exempt under specific conditions.
• Goods for Specific Zones: Certain supplies to entities located in Economic Zones and High-Tech Parks, such as natural gas and electricity distribution, can be VAT-exempt.
• Import of Certain Ships: Imports of ships of at least 5000 Dead Weight Tonnage, not older than 15 years, have been exempted from VAT.
• Locally Manufactured Goods in Hi-Tech Parks: Investors in Hi-Tech Parks may receive VAT exemptions on the production level of goods at varying rates (e.g., 100% for procurement providers, 80% for electricity distribution).
• Other Essential Goods: The NBR often issues SROs to exempt VAT on essential goods to provide relief to citizens. This can include specific food items or other necessities.

Exempted Services (as per the First Schedule and other notifications):

• "Services such as land preparation and cultivation for agricultural purposes are exempt from VAT."
• Social Welfare Services: Services provided by orphanages, old age homes, and rehabilitation centers run by the government or registered NGOs (non-governmental organizations).
• Cultural Services: Public library services, services provided by museums and archives run by the government.
• Financial Services: Services rendered by a bank or financial institution on account balances up to a certain limit (currently BDT 100,000). Wages and salaries, house rent, and spending on religious activities.
• Transportation Services: "Transportation Services: The transportation of goods within Bangladesh intended for export is exempt from VAT."
• Healthcare and Education: Healthcare services and education services provided by government institutions and registered private educational institutions (though there have been discussions and changes in this area over time, so specific conditions should be checked).
• Personal Services: Services provided by domestic servants.
• Services for Export-Oriented Industries: Security services, laboratory testing services, and freight forwarding services for export consignments.
• Services in Specific Zones: Procurement provider services and electricity distribution within Economic Zones and High-Tech Parks in Bangladesh are exempt from VAT.
• Services Related to Temporary Imports: Services for repairing, rebuilding, maintaining, or altering temporarily imported goods that are destined for re-export are VAT-exempt in Bangladesh.
• Services Under Warranty: The supply of goods under warranty for repair or replacement, along with the related repair or replacement services for goods imported under warranty (if returned within the warranty period), are exempt from VAT in Bangladesh.
  
• Important Considerations:

• The list of exempted goods and services can change through amendments to the VAT Act and the issuance of new SROs.
• Exemptions may come with specific conditions and limitations.
• Suppliers dealing exclusively in exempted goods and services are generally not eligible for input tax credit.
• Businesses dealing in both taxable and exempted supplies can usually avail proportionate input tax credit related to their taxable supplies.

"For the most accurate and current list, it is advised to consult the official Value Added Tax and Supplementary Duty Act of 2012, along with the Statutory Regulatory Orders (SROs). This list of VAT-exempt goods and services is issued by the National Board of Revenue (NBR) of Bangladesh, and these resources can be accessed on the NBR website."