1[46B. Exemption from tax of newly established industrial undertakings set up between the period of July, 2011 and 2[June, 3, etc. in certain cases.-
(1) Subject to the provisions of this Ordinance, income, profits and gains under section 28 from an industrial undertaking (hereinafter referred to as the said undertaking) set-up in Bangladesh between the first day of July, 2011 and the 4[thirtieth day of June, 5 (both days inclusive) shall be exempted from the tax payable under this Ordinance for the period, and at the rate, specified below:
if the said undertaking is set-up in-
6[(i) Dhaka, Mymensingh and” Chittagong divisions, excluding Dhaka, Narayanganj, Gazipur, Chittagong, Rangamati, Bandarban and Khagrachari districts, for a period of five years beginning with the month of commencement of commercial production of the said undertaking:
|Period of Exemption Rate of Exemption||Rate of Exemption|
|For the first and second year||100% of income|
|For the third year||60% of income|
|For the fourth year||40% of income|
|For the fifth year||20% of income ;|
1 Subs. by F.A. 2011
2 Subs for "June 2013" by F. A. 2013
3 Subs. for "2015" by F.A. 2014
4 Subs for "thirtieth day of June, 2013" by F. A. 2013
5 Subs. for "2015" by F.A. 2014
6 Subs. by F.A. 2017
1[(ii) Rajshahi, Khulna, Sylhet, Barisal and Rangpur divisions (excluding City Corporation area) and Rangamati, Bandarban and Khagrachari districts, for a period of ten years beginning with the month of commencement of commercial production of the said undertaking:
|Period of Exemption Rate of Exemption||Rate of Exemption|
|For the First and second year||100% of income|
|For the third year||70% of income|
|For the fourth year||55% of income|
|For the fifth year||40% of income|
|For the sixth year||25% of income|
|For the seventh to tenth year||20% of income:|
Provided that any industry engaged in the production of item as referred to in clause (e) or clause (l) of sub section (2) shall be entitled to exemption from tax under the provision of this section even if it is set up in the districts of Dhaka, Gazipur, Narayanganj or Chittagong.]
1 Subs . by F.A. 2014
(2) For the purpose of this section-
"industrial undertaking" means an industry engaged in the production of-
(a) active pharmaceuticals ingredient industry and radio pharmaceuticals industry;
1[(aa) automobile manufacturing industry]
(b) barrier contraceptive and rubber latex;
(c) basic chemicals or dyes and chemicals;
(d) basic ingredients of electronic industry (e.g. resistance, capacitor, transistor, integrator circuit);
2[(dd)bi-cycle manufacturing industry]
3[(gg) brick made of automatic Hybrid Hoffmann Kiln 4[or tunnel kiln] technology;]
1 Ins . by F.A. 2015
2 Ins . by F.A. 2015
3 Ins . by F.A. 2014
4 Ins . by F.A. 2015
(i) computer hardware;
(j) energy efficient appliances;
(k) insecticide or pesticide;
(n) processing of locally produced fruits and vegetables;
(o) radio-active (diffusion) application industry (e.g. developing quality or decaying polymer or preservation of food or disinfecting medicinal equipment);
(p) textile machinery;
(q) tissue grafting; 1[or
[(qq) tyre manufacturing industry;or]
(r) any other category of industrial undertaking as the Government may, by notification in the official Gazette, specify.
(3) Notwithstanding anything contained in sub-section (2), for the purpose of this section industrial undertaking shall not include expansion of such an existing undertaking.
(4) The exemption under sub-section (1) shall apply to the said undertaking if it fulfils the following conditions, namely:-
(a) that the said undertaking is owned and managed by-
(i) a body corporate established by or under any law for the time being in force with its head office in Bangladesh; or
(ii) a company as defined in কোম্পানী আইন, 1994 (1994 সনের ১৮ নং আইনকোম্পানী আইন) with its registered office in Bangladesh and having a subscribed and paid up capital of not less than two million taka on the date of commencement of co mmercial production;
1Omitted 'or' and ins. new claus(qq) by F. A. 2015
(b) that thirty percent of the exempted income under sub- section (1) is invested in the said undertaking or in any new industrial undertaking during the period of exemption or within one year from the end of the period to which the exemption under that sub -section relates and in addition to that, another ten percent of the exempted income under sub-section (1) is invested in each year before the expiry of three months from the end of the income year in the purchase of shares of a company listed with any stock exchange, 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 quantum of investment referred to in this clause shall be reduced by the amount of dividend, if any, declared by the company enjoying tax exemption under this section;
(c) that the said undertaking is not formed by splitting up or by reconstruction or reconstitution of business already in existence or by transfer to a new business of any machinery or plant used in business which was being carried on in Bangladesh at any time before the commencement of the new business;
(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 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 six months from the end of the month of commencement of commercial production;
(f) that the said undertaking obtained a clearance certificate for the relevant income year from the Directorate of Environment;
(g) that the said undertaking maintains books of accounts on a regular basis and submits return of its income as per provisions laid down in section 75 of this Ordinance.]
(5) Notwithstanding anything contained in this section, where an undertaking enjoying exemption of tax under this section is engaged in any commercial transaction with another undertaking or company having one or more common sponsor directors, and during the course of making an assessment of the said undertaking if the Deputy Commissioner of Taxes is satisfied that the said undertaking has purchased or sold goods at higher or lower price in comparison to the market price with intent to reduce the income of another undertaking or company, the exemption of tax of that undertaking shall be deemed to have been withdrawn that assessment year in which such transaction is made.
(6) The Board shall give its decision on an application made under clause (e) of sub-section (4) within forty five days 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:
Provided that the Board shall not reject any application made under this section unless the applicant is given a reasonable opportunity of being heard.
(7) The Board may, on an application of any person aggrieved by any decision or order passed under sub-section (6), if the application is made within four months of the receipt or such decision or order, review the previous decision, order or orders and pass such order in relation thereto as it thinks fit.
(8) The income, profits and gains of the undertaking to which this section applies shall be computed in the same manner as is applicable to income chargeable under the head "Income from business or profession".
Provided that in respect of depreciation, only the allowances for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.
(9) The income, profits and gains of the undertaking to which this section applies shall be computed separately from other income, profits and gains of the assessee, if any, and where the assessee sustains a loss from such undertaking it shall be carried forward and set off against the profits and gains of the said undertaking for the next year and where it cannot be wholly set off, the amount of the loss not so set off, shall be carried forward for the following year and so on, but no loss shall be carried forward beyond the period specified by the Board in the order issued under sub-section (6) or (7).
(10) Unless otherwise specified by the Government, nothing contained in this section shall be so construed as to exempt the following from tax chargeable under this section:-
(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;
(b) any income of the said undertaking classifiable as "Capital gains"chargeable under the provisions of section 31;
(c) any income of the said undertaking resulting from disallowance made under section 30.
(11) Where any exemption is allowed under this section and in the course of making assessment, the Deputy Commissioner of Taxes is satisfied that any one or more of the conditions specified in this section are not fulfilled, the exemption shall stand withdrawn for the relevant assessment year and the Deputy Commissioner of Taxes shall determine the tax payable for such year.
1[or any individual not being a Bangladeshi citizen is employed or allowed to work without prior approval of the Board of Investment or any competent authority of the Government, as the case may be, for this purpose]
(12) Any such undertaking approved under this section may, not later than one year from the date of approval, apply in writing to the Board for the cancellation of such approval, and the Board may pass such order or orders thereon as it may deem fit.
(13) Notwithstanding anything contained in this section, the Board may, in the public interest, cancel or suspend fully or partially any exemption allowed under this section.
(14) The Board may make rules regulating the procedure for the grant of approval under sub-section (6), review under sub-section (7), furnish information regarding payment of other taxes by the said undertaking, and take such other measures connected therewith or incidental to the operation of this section as it may deem fit.
1Ins.clause (qq) by F.A. 2015
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