The Finance Act, 1979

An Act to give effect to the financial proposals of the Government and to amend certain laws.

ACT NO. V OF 1979

30th June, 1979

An Act to give effect to the financial proposals of the Government and to amend certain laws. WHEREAS it is expedient to make provisions to give effect to the financial proposals of the Government and to amend certain laws for the purposes hereinafter appearing; It is hereby enacted as follows:-

Section 1. Short title and commencement

(1) This Act may be called the Finance Act, 1979.

(2) Subject to the Provisional Collection of Taxes Act, 1931 (XVI of 1931), and the declaration made thereunder, this Act shall, except as otherwise provided, come into force on the first day of July, 1979.

Section 2. Amendment of Act XI of 1922

The following amendments shall be made in the Income-tax Act, 1922 (XI of 1922), namely:-

(1) in section 2, in clause (6A), in sub-clause (a), after the words “payment made by a company”, the comma, words and figure “, including a company the income, profits and gains of which is exempted from payment of taxes under section 14A” shall be inserted;

(2) in section 4, after sub-section (2D), the following new sub-section (2E) shall be inserted, namely:-

“(2E) where, in any previous year the assessee has incurred expenses and he offers no explanation about the nature or source of the money from which the expenses were met or the explanation offered by him is not, in the opinion of the Deputy Commissioner of Taxes, satisfactory, the amount of expenses may be deemed to be the income of the assessee for such previous year.”;

(3) in section 10,-

(a) in sub-section (2), after clause (vibb), the following new clauses (vic) and (vid) shall be added, namely:-

“(vic) an investment allowance equivalent to twenty per cent of the cost of a passenger vessel or a fishing trawler referred to in clause (vibb) in respect of the year in which the passenger vessel or the fishing trawler is first put to use for public utility;

(vid) in respect of depreciation of ships, other than ships ordinarily plying on inland waters, registered in Bangladesh and brought into use in Bangladesh for the first time on any day between the first day of July, 1979, and the thirtieth day of June, 1983, being the property of the assessee, a sum equivalent to 40 per cent in the first year, 30 per cent in the second year and 30 per cent in the third year on the original cost to the assessee, notwithstanding anything contrary contained in clause (vi):

Provided that-

(a) the ship, other than the ship ordinarily plying on inland waters, in respect of which the depreciation is claimed, fulfils such specifications as may be specified in this behalf by the Government by notification in the official Gazette;

(b) the prescribed particulars have been duly furnished;

(c) where the full effect cannot be given to such allowance in any year owing to there being no profits or gains chargeable for that year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of clause (b) of the proviso to sub-section (2) of section 24, the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following year and deemed to be the part of that allowance, or, if there is no such allowance for that year, be deemed to be the allowance for that year and so on for succeeding years; and

(d) the aggregate of all such allowances made under this Act shall, in no case, exceed the original cost to the assessee of the ship other than the ship ordinarily plying on inland waters:

Provided further that the ship, other than the ship ordinarily plying on inland waters, to which the depreciation at 40%, 30% and 30% has been allowed shall not be entitled to the allowances referred to in clause (vi);”;

(b) in sub-section(4), in clause (e), for the full stop at the end a semi-colon shall be substituted and thereafter the following new clause (f) shall be added, namely:-

“(f) any allowance in respect of such expenditure on publicity and advertisement as may be prescribed.”;

(4) in section 12B, in sub-section (1), for the first proviso the following shall be substituted, namely:-

“Provided that any distribution of capital assets on the total or partial partition of a Hindu undivided family, or on the dissolution of a firm or other association of persons, or on the liquidation of a company, or any transfer under a deed of gift, bequest, will or transfer on irrevocable trust shall not, for the purposes of this section, be treated as sale, exchange or transfer of the capital assets:”;

(5) in section 14A,-

(a) in sub-section (2B),-

(i) in clause (c),-

(1) for the word “sixty” occurring twice, the word “thirty” shall be substituted in both the places; and

(2) for the word “thirty”, the word “fifteen” shall be substituted;

(ii) in clause (d), in the proviso, for the semi-colon a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided further that the National Board of Revenue may admit an application after the expiry of the said period of four months if it is satisfied that there was sufficient cause for not making the application within the said period;”;

(b) in sub-section (2D), in clause (c),-

(i) for the word “sixty” occurring twice, the word “thirty” shall be substituted in both the places; and

(ii) for the word “thirty”, the word “fifteen” shall be substituted;

(a) after sub-section (2D), the following new sub-section (2E) shall be inserted, namely:-

“(2E) Nothing contained in this section shall be deemed to exempt from tax any dividend paid, credited or distributed or deemed to have been paid, credited or distributed by a company to its shareholders out of the profits or gains exempt from tax under this section.”;

(6) in section 15AA, in sub-section (1), for the comma, words, brackets and figures “, sub-section (3A) and sub-section (4)” the words, brackets and figure “and sub-section (3A)” shall be substituted and shall be deemed to have been so substituted on and from the 1st day of July, 1978;

(7) in section 15C, in sub-section (1), the words, brackets and figures “of sub-section (4) of section 15 and the provisions” shall be omitted and shall be deemed to have been so omitted on and from the 1st day of July, 1978;

(8) in section 15CC, in sub-section (1), the word, brackets and figure “and (4)” shall be omitted and shall be deemed to have been so omitted on and from the 1st day of July, 1978;

(9) in section 15F, the comma, words, brackets and figure “, and sub-section (4)” shall be omitted and shall be deemed to have been so omitted on and from the 1st day of July, 1978;

(10) in section 17, in sub-section (5), in clause (b), in sub-clause (ii), in paragraph (2), for the full stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided that nothing contained in this sub-section shall apply in case of an assessee whose income chargeable under the head “capital gains” has arisen on account of disposal by him of his capital asset or assets acquired before the 14th day of August, 1947.”;

(11) in section 22,-

(a) in sub-section (1), after the words “shall furnish a return”, the words “in the prescribed form and verified in the prescribed manner” shall be inserted;

(b) in sub-section (4A), for the words “the total assets and liabilities of himself” the words and comma “the total assets, liabilities and expenses of himself” shall be substituted;

(12) in section 23B, in sub-section (6), for the words and figures “under section 18 or section 18A” the words, comma and figures “under section 18, section 18A or section 22A” shall be substituted;

(13) in section 25, in sub-section (6), for the word “member” the word “partner” shall be substituted;

(14) in section 30, in sub-section (1), for the words “additional tax” the words “simple interest” shall be substituted and shall be deemed to have been so substituted on and from the 1st day of July, 1978;

(15) in section 31, in sub-section (2), after the word and comma “appeal,”, the words and comma “make such further enquiry as he thinks fit, or” shall be inserted;

(16) in section 34,-

(a) in sub-section (1A), in clause (b), the word “deliberately” shall be omitted;

(b) in sub-section (2), the word “deliberately” shall be omitted; and

(17) in section 47A,-

(a) in sub-section (1), for the words “twenty thousand Taka” the words “fifty thousand Taka” shall be substituted; and

(b) after sub-section (2), the following new sub-section (2A) shall be inserted, namely:-

“(2A) Notwithstanding anything contained in sub-section (1), if any right, title or interest in any immovable property is transferred in collusion with the purchaser to avoid obtaining of a certificate from the Deputy Commissioner of Taxes as provided for in sub-section (1), the liability of the transferor to pay tax under this Act or the Gift-tax Act, 1963 (XIV of 1963), shall be a charge on the property so transferred.”;

(18) in section 52, for the words, brackets, figures and letters “sub-clause (ivb) of clause (b) of sub-section (4A) of section 15BB” the words, brackets, letters and figures “or clause (d) of sub-section (2B) of section 14A” shall be substituted.

Section 3. Amendment of Ben. Act V of 1922

In the Amusements Tax Act, 1922 (Ben. Act V of 1922), CHAPTER I shall stand repealed on such date as the Government may, by notification in the official Gazette, appoint.

Section 4. Amendments of Act XXXII of 1934

The amendments set out in the First Schedule to this Act shall be made in the Tariff Act, 1934 (XXXII of 1934).

Section 5. Amendments of Act I of 1944

The following amendments shall be made in the Excises and Salt Act, 1944 (I of 1944), namely:-

(1) throughout the Act, except in clause (b) of section 2, for the words “National Board of Revenue” the word “Board” shall be substituted;

(2) for section 2 the following shall be substituted, namely:-

“ 2. Definitions.- In this Act, unless there is anything repugnant in the subject or context,-

(a) “admission” includes admission as a spectator or as one of an audience, and admission for the purpose of amusement by taking part in an entertainment;

(b) “Board” means the National Board of Revenue constituted under the National Board of Revenue Order, 1972(P.O. No. 76 of 1972);

(c) “broker” or “commission agent” means a person who, in the ordinary course of business, makes contracts for the sale or purchase of excisable goods for others;

(d) “charge for admission” includes any payment made by a person who having been admitted to one part of a place of entertainment is subsequently admitted to another part thereof, for admission to which a payment involving a duty or a higher rate of duty is required, and any payment for seats or other accommodation in a place of entertainment;

(e) “curing” includes wilting, drying, fermenting and any process for rendering an unmanufactured product fit for marketing or manufacture;

(f) “distributor” means a person appointed by a manufacturer in or for a specified area to purchase excisable goods from him for sale to a wholesale dealer in that area;

(g) “enterprise” includes a company, firm, establishment, institution, club or any other association of persons by whatever name called;

(h) “entertainment” includes any cinema show, theatrical performance, musical performance, amusement, exhibition, show or performance in any other manner or by whatever name called, games and sports to which persons are admitted on payment;

(i) “Excise Officer” means any officer of the Excise Department or any person invested by the Board with any of the powers of an Excise officer under this Act or the rules made thereunder;

(j) “excisable goods” means goods specified in Part I of the First Schedule as being subject to a duty of excise and includes salt;

(k) “excisable services” means services, facilities, utilities and entertainments specified in Part II of the First Schedule as being subject to a duty of excise;

(l) “factory” means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on;

(m) “manufacture” includes any process incidental or ancillary to the completion of a manufactured product and any process of remanufacture, re-making, re-conditioning or repair and the process of packing or re-packing such product; and

(i) in relation to tobacco, includes the preparation of cigarettes, cigars, cheroots, biris, cigarette or pipe or hookah tobacco, chewing tobacco or snuff; and

(ii) in relation to salt, includes collection, removal, preparation, steeping, evaporation, boiling, or any one or more of these processes, the separation or purification of salt obtained in the manufacture of saltpetre, the separation of salt from earth or other substance so as to produce alimentary salt and the excavation or removal of natural saline deposits or efflorescence; and the word “manufacturer” shall be construed accordingly and shall include not only a person who employs hired labour in the production or manufacture of excisable goods, but also any person who engages in their production or manufacture on his own account if those goods are intended for sale; and

(iii) in respect of gold and silver and products thereof, also any person dealing in gold and silver and products thereof who, whether or not he carries out any process of manufacture himself or through his employees or relatives, gets any process of manufacture carried out on his behalf by any person who is not in his employ, and any person so dealing in gold and silver and products thereof shall be deemed to have manufactured for all purposes of this Act all products of gold or silver in which he deals in any capacity whatever;

(n) “prescribed” means prescribed by rules made under this Act;

(o) “sale” and “purchase”, with their grammatical variations and cognate expressions, mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other consideration;

(p) “saltpetre” includes rasi, sajji, and all other substances manufactured from saline earth, and kharinun and every form of sulphate or carbonate of soda;

(q) “salt factory” includes-

(i) a place used or intended to be used in the manufacture of salt and all embankments, reservoirs, condensing and evaporating pans, buildings and waste places situated within the limits of such place as defined from time to time by the Collector of Excise;

(ii) all drying grounds and storage platforms and store-houses appertaining to any such place;

(iii) land on which salt is spontaneously produced; and a “private salt factory” is one not solely owned or not solely worked by the Government;

(r) “wholesale dealer” means a person who buys or sells excisable goods wholesale for the purpose of trade or manufacture, and includes a broker or commission agent who, in addition to making contracts for the sale or purchase of excisable goods for others, stocks such goods belonging to others as an agent for the purpose of sale.”;

(3) in section 4, after sub-section (3), the following new sub-section (4) shall be added on such date as the Government may, by notifications in the official Gazette, appoint, namely:-

“(4) Where under this Act any entertainment is subject to a duty dependent on the charge for admission to such entertainment and-

(a) the proprietor or enterprise of an entertainment admits any person to any place of entertainment as a spectator or as an audience for the purpose of amusement by taking part in it without any payment or on payment of an amount less than the amount normally charged for admission thereto, the duty shall nevertheless be levied and collected on the amount which would have been charged for such entertainment had it not been provided free of charge or at a concessional rate; and

(b) the amount with reference to which the duty shall be payable shall be the amount charged for admission to an entertainment, exclusive of the duty and any other tax, which a spectator or as audience pays or would have to pay but for any special relation ship between the parties in question.

Explanation.- For the purpose of clause (a),-

(i) “proprietor” in relation to any entertainment, includes any person responsible for the management thereof; and

(ii) in case there are different classes of seats in the entertainment 'place of entertainment' means the class to which such person is admitted.”;

(4) in section 33, in clause (b), for the words and comma “Deputy Collector, Assistant Collector or Superintendent of Excise” the words and comma “Deputy Collector of Excise, Assistant Collector of Excise or Superintendent of Excise” shall be substituted;

(5) in section 37, in sub-section (2), after clause (xi), the following new clauses

(xia) and (xib) shall be inserted, namely:-

“(xia) provide for the supply and use of stamps or stamped tickets or for the stamping of tickets sent to be stamped; and for securing the defacement of stamps when used; for controlling the use of barriers or mechanical contrivances in use for admission of persons to the entertainments; for the checking of admissions and for the renewal of damaged or spoiled stamps;

(xib) provide for the maintenance of books of accounts, registers, bills and tickets and for the submission of returns and statements;”; and

(6) the First Schedule shall be amended in the manner set out in the Second Schedule to this Act.

Section 6. Amendment of Act X of 1950

In the Estate Duty Act, 1950 (X of 1950), in section 25A, in clause (3), in the proviso, for the words “five lakh” the words “ten lakh” shall be substituted.

Section 7. Amendment of Act III of 1951

In the Sales Tax Act, 1951 (III of 1951), in section 22, for the figure and letter “38A” the figure and letters “38AA” shall be substituted.

Section 8. Amendments of Act XV of 1963

The following amendments shall be made in the Wealth-tax Act, 1963 (XV of 1963), namely:-

(1) in section 2, in clause (e), sub-clause (iii) shall, be omitted;

(2) in section 5, in sub-section (1), in clause (xi), for the full stop at the end a semi-colon shall be substituted and thereafter the following new clause (xii) shall be added, namely:-

“(xii) a house owned and occupied by an assessee for the purpose of his own residence, subject to the following limits, namely:-

(a) where the value of such house does not ÔÇªÔÇªÔÇªÔÇªthe whole of such value; exceed Taka ten lakh,

(b) where the value of such house exceeds Taka ten lakh, ÔÇªÔÇªÔÇª..Taka ten lakh.”;

(3) for the Schedule the following shall be substituted, namely:-

| | | | | --- | --- | --- | | | “THE SCHEDULE (See section 3) Rates of Wealth-tax | | | | | | | | | Rate. | | 1. | On the first Taka five lakh of net wealth .. | Nil | | 2. | On the next Taka five lakh of net wealth .. | ½ % | | 3. | On the next Taka five lakh of net wealth .. | ¾ % | | 4. | On the next Taka five lakh of net wealth .. | 1 % | | 5. | On the next Taka five lakh of net wealth .. | 1¼ % | | 6. | On the next Taka five lakh of net wealth .. | 1 ½ % | | 7. | On the next Taka five lakh of net wealth .. | 2 % | | 8. | On the balance of net wealth .. | 2½ % |

Section 9. Amendments of Act IV of 1969

The following amendments shall be made in the Customs Act, 1969 (IV of 1969), namely:-

(1) in section 30, in sub-section (2), after the words “of this section”, the comma, word and figure, “, section 31” shall be inserted;

(2) for section 31 the following shall be substituted, namely:-

“31. Date for determination of export duty.- The rate of duty applicable to, and the rate of exchange for computation of the value of, any goods exported shall be the rate of duty or, as the case may be, the rate of exchange prevailing on the date of the delivery of the bill of export under section 131:

Provided that where the export of any goods is permitted without a bill of export or in anticipation of the delivery of such a bill, the rate of duty applicable to, and the rate exchange for the computation of the value of, such goods shall be the rate of duty or, as the case may be, the rate of exchange applicable on the date on which loading of the goods on the outgoing conveyance commences.”.

Section 10. Income-tax and Super-tax

(1) Subject to the provisions of sub-sections (2), (3), (4) and (5), in making any assessment for the year beginning on the first day of July, 1979,-

(a) income-tax shall be charged at the rate specified in Part 1 on the Third Schedule, and

(b) the rates of super-tax shall, for the purpose of section 55 of the Income-tax Act, 1922 (XI of 1922), be those specified in Part II of the Third Schedule.

(2) In making any assessment for the year beginning on the first day of July, 1979,-

(a) where the total income of an assessee, not being a company, includes any income chargeable under the head “Salaries” or any income chargeable under the head “Interest on Securities” the income-tax payable by the assessee on that part of his total income which consists of such inclusion shall be an amount bearing to the total amount of income-tax payable according to the rates applicable under the operation of the Finance Ordinance, 1978 (XXI of 1978), on his total income the same proportion as the amount of such inclusion bears to his total income; and

(b) where the total income of a company includes any profits and gains from life insurance business, the super-tax payable by the company shall be reduced by an amount equal to 12.5 per cent of that part of its total income which consists of such inclusion.

(3) In making any assessment for the year beginning on the first day of July, 1979, where the assessee is a co-operative society, the tax shall be payable at the rate specified in paragraph A of Part I, or paragraph B of Part I and paragraph A of Part II of the Third Schedule as if the assessee were a company to which the proviso to sub-paragraph (1) of paragraph A of the said Part II applied, whichever treatment is more beneficial to the assessee:

Provided that in calculating for the purposes of this sub-section, the amount of income-tax at the rates specified in paragraph A of Part I of the Third Schedule, no deduction in respect of any allowance or sums referred to in the proviso to the said paragraph shall be made.

(4) (a) In making any assessment for the year beginning on the first day of July, 1979, where the total income of an assessee not being a company to which the proviso to sub-paragraph (1) of paragraph A of Part II of the Third Schedule does not apply, includes any profits and gains derived from the export of goods out of Bangladesh, income-tax and super-tax, if any, payable by him in respect of such profits and gains shall, subject to the provisions of clauses (b) and (c), be reduced by an amount computed in the manner specified hereunder:

| | | Amount. | | --- | --- | --- | | (i) | Where the goods exported abroad had not been manufactured by the assessee who exported them: | 30 per cent of the income-tax and super-tax, if any, attributable to export sales. | | | | | | | (a) and where the export sales during the relevant year exceed the export sales of the preceding year: | Plus an additional 1 per cent for every increase of 10 per cent in export sales over those of the preceding year, subject to an overall maximum of 40 per cent. | | | | | | | (b) and where the export sales during the relevant year do not exceed the export sales of the preceding year: | Minus 1 per cent for every decrease of 10 per cent in export sales over those of the preceding year, subject to an overall minimum of 20 per cent. | | | | | | (ii) | Where the goods exported had been manufactured by the assessee who had exported them: | | | | | | | | (a) Where the export sales do not exceed 10 per cent of the total sales: | Nil. | | | | | | | (b) Where the export sales exceed 10 per cent but do not exceed 20 per cent of the total sales: | 30 per cent of the income-tax and super-tax, if any, attributable to export sales. | | | | | | | (c) where the export sales exceed 20 per cent but do not exceed 30 per cent of the total sales: | 40 per cent of the income-tax and super-tax, if any, attributable to export sales. | | | | |

| | (d) where the export sales exceed 30 per cent of the total sales: | 50 per cent of the income-tax and super-tax, if any, attributable to export sales. | | --- | --- | --- |

| (b) Nothing contained in clause (a) shall apply in respect of the following goods or class of goods, namely:- | | --- | | | | (i) tea, | | | | (ii) raw jute, | | | | (iii) jute manufacture, | | | | (iv) raw hides and skin and wet-blue leather, | | | | (v) such other goods as may be notified by the National Board of Revenue from time to time. | | | | (c) The National Board of Revenue may make rules providing for the computation of profits and the tax attributable to export sales and for such other matters as may be necessary to give effect to the provisions of this sub-section. | | | | (5) In cases to which section 17 of the Income-tax Act, 1922 (XI of 1922), applies the tax chargeable shall be determined as provided in that section but with reference to the rates imposed by sub-section (1), and in accordance, where applicable, with the provisions of sub-section (2). | | | | (6) For the purposes of making deduction of tax under section 18 of the Income-tax Act, 1922 (XI of 1922), the rates specified in Part I and Part II of the Third Schedule shall apply as respects the year beginning on the first day of July, 1979, and ending on the thirtieth day of June, 1980. | | | | (7) For the purposes of this section and of the rates of tax imposed thereby, the expression “total income” means total income as determined for the purposes of income-tax or super-tax, as the case may be, in accordance with the provisions of the Income-tax Act, 1922 (XI of 1922); and the expression “Public company” means a company- | | | | (i) in which not less than fifty per cent of the shares are held by the Government, or | | | | (ii) whose shares were the subject of dealings in a registered stock exchange in the taxable territories at any time during the previous year and remained listed on the stock exchange till the close of that year. |