45. Exemption of income of an industrial undertaking.-

45. Exemption of income of an industrial undertaking.-

(1) Subject to the provisions of this Ordinance, the income, profits and gains of an industrial undertaking set up in Bangladesh between the first day of July, 1974, and the thirtieth day of June, 1985 (both days inclusive), shall be exempt from tax payable under this Ordinance for the period specified below-

(a) if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify to be "Special Economic Zone", for a period of twelve years beginning with the month of commencement of commercial production of the undertaking;

(b) if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify in this behalf, for a period of nine years beginning with the month of commencement of commercial production of the undertaking ; and

 (c)  in other areas, for a period of five years beginning with the month of  such commencement.

Explanation.- For the purposes of this section, "industrial undertaking" includes expansion of an existing undertaking if such expansion constitute-

(a) an identifiable unit for production of similar or other goods or class of goods; or

(b)  a similar unit carrying on an identifiable industrial process, but does not include an undertaking which is formed by splitting up or reconstruction of an existing business or by the transfer of machinery or plant of an existing business in Bangladesh to a new business.                   

(2)   The exemption under sub-section (1) shall apply to an industrial undertaking (hereinafter referred to as the "said undertaking") which fulfills the following conditions, namely:-

(a)       that the said undertaking is owned and managed by-

(i)     a body corporate established by, or in pursuance of, an Act of  Parliament with its head office in Bangladesh; or

(ii)    a company registered under the Companies Act, 1913 (VII of 1913), with its registered office in Bangladesh and having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of commercial production;

(b)   that the said undertaking belongs to such class of industry as the Board may, by notification in the official Gazette, specify for the purposes of this section;

(c)    that a part of the income exempted under this section is reinvested in the said undertaking or is invested in the purchase of bond issued by the Government and such reinvestment or investment is not-

(i)   less than fifteen per cent of such income, if it is an undertaking set up in the areas referred to in sub-section (1) (a) and (b); and

(ii)  less than thirty per cent in other areas;

 (d)   that the said undertaking is approved and, during the relevant income year, stands approved by the Board for the purposes of this section;

 (e)  that the application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board within one hundred and twenty days from the date of commencement of commercial production:

Provided that the Board may admit an application after the expiry of the said period of one hundred and twenty days if it is satisfied that there was sufficient cause for not making the application within the said period.

¹[(2A)Subject to the provisions of this Ordinance, the income, profits and gains of     an industrial undertaking set up in Bangladesh between the first day of July, 1985, and the thirtieth day of June, ²[1995 (both days inclusive), shall be exempt  from  the  tax  payable  under  this  Ordinance  for  the  period  specified below-

(a) if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify to be "Special Economic Zone", for a period of twelve years beginning with the month of commencement of commercial production of the undertaking;

 (b)   if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify to be "Least Developed Areas", for a period of nine production of the undertaking;

 (c)   if the undertaking is set up in such areas as the Board may, by notification in the official Gazette, specify to be "Less Developed Areas", for a period of ³[seven] years beginning with the month of commencement of commercial production of the undertaking; and

 (d) if the undertaking is set up in the city of Dhaka, Chittagong or Khulna or the municipality of Narayanganj, or within ten miles from the outer limits thereof, for a period of ⁴[five] years beginning with the month of commencement of commercial production of the undertaking.

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¹ Ins. Sub-section (2A) and (2B) by F.O. 1985
² Subs. "2000" for "1990" by F.A. 1989 and subsequently subs. "1995" for "2000" by F.A. 1991
³ Subs. for "six" by I.T. (amend.) Ord. 1986, dt. 0 8-07-1986
⁴ Subs. for "four" by I.T. (amend.) Ord. 1986, dt. 0 8-07-1986

(2B)The exemption under sub-section (2A) shall apply to an industrial undertaking (hereinafter referred to as the "said undertaking") which fulfills the following conditions, namely:-

      (a)    that the said undertaking is owned and managed by-

(i) a body corporate established by, or in pursuance of, an Act Parliament with its head office in Bangladesh; or

(ii) a company registered under ¹[the Companies Act, 1913 (VII of 1913) or কোম্পানী আ‌ইন, 1994 (1994 সনের 18নং আইন), with its registered office in Bangladesh and having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of commercial production;

(b) that the said undertaking belongs to such class of industry as the Board may, by notification in the official Gazette, specify for the purpose of this sub-section;

²[(c)  that a part of the income exempted under sub-section(2A), representing not less than ten percent, of such income, is invested, within nine months from the end of the income year, in the purchase of bonds or securities issued by the Government and such bonds or securities are retained for at least three years from the date of purchase;];

³[(cc)      that a part of the income exempted under sub-section (2A) is invested, ⁴[during the period, or within one year from the end of the period] to which the exemption under that sub-section relates, in the said undertaking or in any new industrial undertaking or in any productive assets being stocks and shares of a public company or bonds or securities issued by the Government and such investment is not less than ⁵[thirty per cent.] of such income, failing which the income so exempted, shall, notwithstanding the provisions of this Ordinance, be subject to tax in the assessment year for which the exemption was allowed:

Provided that the Board may admit an application after the expiry of the said period of ¹[one hundred and eighty days] if it is satisfied that there was sufficient cause for not making the application within the said period]

²(2C)   The Board shall give its decision on an application made under clause (e) of sub-section (2B) within ³[three months] from the date of receipt of the application by the Board, failing which the undertaking shall be deemed to have been approved by the Board for the purposes of this section.

(3)   The income, profits and gains of the said undertaking to which this section applies, shall be computed in accordance with the provisions of sections 28 and 29:

⁴[Provided that in respect of depreciation, only the allowances for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.]

(5)   Nothing contained in this section shall be so construed as to exempt the following:-

(a)  any dividend paid, credited or distributed or deemed to have been paid, credited or distributed by a company to its share-holders out of the profits and gains exempt from tax under this section ; and

(b) any income of the said undertaking classifiable as "Capital gains" chargeable under the provisions of section 31.

(6)  Where any exemption has been allowed under this section and it is subsequently discovered by the Deputy Commissioner of Taxes that any one or more of the conditions specified in this section were not fulfilled, the exemption originally allowed shall be deemed to have been wrongly allowed, and the Deputy Commissioner of Taxes may, notwithstanding anything contained in this Ordinance, re-compute the total income of, and the tax payable by, the assessee for the relevant income year and the provisions of section 93 or 94 shall, so far as may be, apply thereto, the period of two years specified in section 94 being reckoned from the end of the assessment year relevant to the income year in which the infringement was discovered.

(7) An industrial undertaking approved under this section may, not later than six months from the date of approval, apply in writing to the Board for the cancellation of such approval, and the Board may pass such orders thereon as it may deem fit.

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