46. Exemption of income of a tourist industry.-

46. Exemption of income of a tourist industry.-

(1) Subject to the provisions of this Ordinance, the income, profits and gains of a tourist industry set up in Bangladesh between the first day of January, 1976, and the thirtieth day of June, 1985 (both days inclusive), shall be exempt from the tax payable under this Ordinance, for the period specified below-

(a) if the industry 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 commencement of its commercial service;

(b) if the industry is set up in the cities of Dhaka, Chittagong, Khulna and Rajshahi and the areas within fifteen miles from the outer municipal limits of those cities, for a period of five years beginning with the month of commencement of its commercial service ; and (c) in other areas, for a period of seven years beginning with the month of such commencement.

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

Explanation.- For the purposes of this section, the expression "tourist industry" means a business, industry or undertaking which caters for the tourists including setting up, establishment or running of hotels, motels, ¹[hunting lodges, amusement and theme park, holiday home, tourist resort, family fun and games, energy park] and private picnic spots of such standard as may be prescribed by the Board.

(2) The exemption under sub-section (1) shall apply to a tourist industry (hereinafter referred to as the "said industry"), which fulfils the following conditions, namely:-

(a) that the said industry is owned and managed by a Bangladeshi company having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of its commercial service;

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¹ Subs. for "hunting lodge" by F.A. 2001

(b) that the said industry shall have such service facilities as the Board may, by notification in the official Gazette, specify in this behalf;

(c)  that a part of the income, profits and gains derived from the said industry exempted under sub-section (1) is reinvested in it or is invested in the purchase of bond issued by the Government, and such reinvestment or investment is not-

(i) less than thirty per cent., if it is an industry set up in the areas referred to in sub- section (1) (b); and

(ii) less than fifteen per cent., in other areas ;

(d) that an 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 of the date of commencement of commercial service;

(e) that the said industry is approved and, during the relevant income year, stands approved by the Board for the purposes of this section.

¹[(2A)Subject to the provisions of this Ordinance, the income, profits and gains of a tourist industry set up in Bangladesh between the first day of July, 1985, and the 30th day of June, ²[1995] (both days inclusive) shall be exempt from the tax payable under this Ordinance, for the period specified below-

(b)  if  the  industry  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  years  beginning  with  the  month  of commencement of its commercial service;

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¹ Subs-sec. (2A) & (2B) ins. by F.O. 1985
² Subs. "2000" for "1999" by F.A. 1989 and subsequently "1995: for "2000" by F.A. 1991

(c) if the industry 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 ¹[seven years] beginning with the month of commencement of its commercial service; and

(d) if the industry is set up in the city of Dhaka, Chittagong or Khulna or the municipality of Rajshahi, or within 15 miles from the outer limits thereof, for a period of ²[five years] beginning with the month of commencement of its commercial service.

(2B)     The exemption under sub-section (2A) shall apply to a tourist industry (hereinafter referred to as the "said industry"), which fulfils the following conditions, namely:-

(a) that the said industry is owned and managed by a Bangladeshi company having subscribed and paid up capital of not less than one lakh taka on the date of commencement of its commercial service;

(b) that the said industry shall have such service facilities as the Board may, by notification in the official Gazette, specify in this behalf;

³[(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;];

⁴[(cc) that a part of the income exempted under sub-section (2A) is invested, ⁵[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 ⁶[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:]

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¹ Subs. for "six years" by I.T. (amend.) Ord. 1986, dated 8-7-86 (w.e.f. 1-7-1985)
² Subs. for "four years" by I.T. (amend.) Ord. 1986, dated 8-7-86 (w.e.f. 1-7-1985)
³ Subs. by F.A. 1992 subsequently omitted by F.A. 1994
⁴ Subs. by F.A. 1992
⁵ Subs. for "within two years" form the end of the period by F.A. 1999
⁶ Subs. for "twenty five percent." by F.A. 1994 which was subs. for twenty per cent by F.,A. 1993.

¹[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;]

(e) that the said industry is approved and, during the relevant income year, stands approved by the Board for the purposes of this section.

³[(2C) The Board shall give its decision on an application made under clause (d) of sub-section (2B) within ⁴[three months] from the date of receipt of theapplication by the Board, failing which the industry shall be deemed to have been approved by the Board for the purposes of this section.

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

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

(4) The profits and gains of the said industry shall be computed separately from other income, profits and gains of the assessee, if any, and where the assessee sustains a loss from such industry, it shall be carried forward and set off against the profits and gains of the said industry for the following year and where it cannot be wholly set off, the amount of the loss not so set off, shall be carried forward for the next year and so on, but no loss shall be carried forward beyond the period of exemption allowed under this section.

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¹ Ins. by F.A. 1999
² Subs. for "one hundred and twenty days" by F.O. 1986
³ Ins. by F.A. 1990
⁴ Subs. by F.A. 1992

(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 shareholders out of the profits and gains exempt from tax under this section; and

(b) any income of the said industry 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..

¹[(8) Notwithstanding anything contained in this section, the Board may, in the public interest, cancel or suspend fully or partially the exemption allowed under this section.]

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¹ Ins. by F. A. 1992

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