BB asks banks
Bangladesh Bank has asked scheduled banks to ensure deduction of the advance income tax from the payable amount of import bills against local letters of credit.
To this end, the BB on Thursday issued a circular to managing directors and chief executive officers of all banks after receiving an instruction from National Board of revenue.
The revenue board issued a special order on November 7 asking the banks to deduct AIT at the time of bill payment against local LCs opened by businesses.
Usually manufacturers, large-scale traders, suppliers and contractors open local LCs for collecting raw materials and other products from local market.
Back-to-back LCs mostly opened by the garment industry under the master LCs for executing export orders do not fall under the provision.
A BB official said that banks as AIT deducting authorities were supposed to deduct the tax while making payments to the suppliers against local LCs.
But some banks often do not deduct the tax, he said.
-With New Age input
