Calculation of net Bill amount in the case of Excluding TDS & VAT

 

Excluding TDS & VAT or net payment,

Suppose, ABCD Co Ltd. has a contract with vendor to pay BDT 100 (net) and if any TDS and VDS is applicable that ABCD will need to bear extra over and above 100. Considering 15% VDS and 10% TDS is applicable in this transaction. How value of VDS and TDS will be calculated?

Answer: If net payment = BDT 100.00 Then it is 90% of the base value or Income as TDS rate is 10% Base value would be = 100*100/90 = BDT 111.11

Therefore, TDS amount of BDT (111.11-100) = BDT 11.11

And VAT amount would be 15% on BDT = BDT 111.11, VAT=111.11*15%=BDT 16.67

As per new VAT Act 2012, Price should be inclusive of VAT amount

Calculation Base Value in the case of Including TDS & VAT

 

WE ASSUME TAX RATE IS 10% AND VAT RATE IS 15%.

Including TDS & VAT

If the invoice value of vendor is Tk. 5000 including VAT @ 15%, submitted for the payment to resident;

Then VAT would be = BDT (5,000 – 5,000 * 100/115)=BDT 652, Tax Deduction at Source (TDS) BDT(5,000 – 652) * 10% = BDT 4,348 @10% = 435

Here base value = BDT 4,348