NBR Launches Digital VAT Refund Drive

As announced earlier, return entry has been integrated into the e-VAT system as a sub-module from Wednesday, January 7. In line with long-standing demands from businesses, the National Board of Revenue (NBR) has implemented this initiative to digitize the tax refund process. As a result, businesses will now be able to apply online and receive excess VAT refunds within 10 working days without having to appear in person before NBR officials. However, to avail refunds online, VAT returns must also be submitted digitally.

NBR stated that the VAT refund process is being launched through the e-VAT system by directly transferring refundable amounts to taxpayers’ bank accounts. Refunds related to income tax, customs duties, and other taxes will also be gradually brought under this online mechanism.

Sources said that under the manual system, it often took six months or even longer in some cases to receive refunds. With the full-scale online system in place, the refund process is expected to be completed within three to ten working days.

Following the introduction of the new module, NBR has started sending e-mails and mobile notifications to taxpayers containing links to the e-VAT system. Through these links, taxpayers can easily use the ‘Hard Copy Return Entry’ sub-module. All previously submitted paper-based returns can be entered into the e-VAT system without penalties or interest until March 31. Once this process is completed, taxpayers will be able to submit all future VAT returns online without interruption.

At the same time, with the launch of the new sub-module, taxpayers who submitted hard copy returns within the timeframe stipulated under Section 64 of the Value Added Tax and Supplementary Duty Act, 2012, will be able to enter their returns into the e-VAT system on their own without incurring any interest or penalties.

NBR believes that this initiative will further enhance transparency and accountability in VAT management and accelerate the full digital transformation of tax administration. The board has sought comprehensive cooperation from taxpayers to achieve this goal.

For a long time, businesses have complained that although refunds are legally due, they are often delayed. Most VAT refunds arise in the case of commercial importers, from whom advance tax is collected at the import stage. After account reconciliation, if it is found that the payable VAT on actual value addition is less than the advance tax paid, the remaining amount becomes refundable under the law. However, claiming such refunds has traditionally been a lengthy and costly process, requiring repeated visits to tax offices. Business leaders say the new system will significantly reduce this hardship.

According to NBR sources, as of September last year, VAT refunds amounting to Tk 14.66 billion had accumulated with NBR’s VAT wing alone, a large portion of which has been stuck for years. No consolidated data is available on refunds pending with the income tax and customs wings, but officials estimate the figure to be several thousand crore taka.

DBTech/DPTB/MUM/OR