1[46A. Exemption from tax of newly established industrial undertakings, etc. in certain cases.-
(1) Subject to the provisions of this Ordinance,2[ profits and gains under section 28 from] an industrial undertaking, tourist industry or physical infrastructure facility (hereinafter referred to as the said undertaking) set-up in Bangladesh between the first day of July, 1995 and the thirtieth day of 3[June, 2008] (both days inclusive) shall be exempt from the tax payable under this Ordinance for the period specified below-
(a) if the said undertaking is set-up in 4[Dhaka and Chittagong divisions,] excluding the hill districts of Rangamati, Bandarban and Khagrachari, for a period of 5[ four] years beginning with the month of commencement of commercial production or operation of the said undertaking;
(b) if the said undertaking is set-up in 6[Rajshahi, Khulna, Sylhet and Barisal divisions and the hill districts of Rangamati, Bandarban and Khagrachari, for a period of 7[six] years beginning with the month of commencement of commercial production or operation of the said undertaking
8.[ Explanation.-- For the purposes of this section, industry or undertaking, tourist industry or physical infrastructure facility does not include expension of an existing undertaking.]
9[(1A) industrial undertaking, tourist industry, or physical infrastructure facility does not include expansion of an existing undertaking for the purpose of this section,-
(i) "industrial undertaking" means an industry engaged in the production of textile, textile machinery, high value garments, pharmaceuticals, melamine, plastic products, ceramics, sanitary ware, steel from iron ore, fertilizer, insecticide & pesticide, computer hardware, petro-chemicals, basic raw materials of drugs,
1 Ins. by F.A. 1995
2 Subs. for "profits and gains of " by F.A. 2006
3 Subs. for "June, 2000" by F.A. 2000 again subs. for "June, 2005" by F.A. 2005
4 Subs. for "Dhaka, Chittagong and Sylhet divisions" by F.A. 2000
5 Subs. for "five" by F.A. 2005
6 Subs. for "Rajshahi, Khulna and Barisal divisions" by F.A. 2000
7 Subs. for "seven" by F.A. 2005
8 Subs. by F.A. 2002 subsequently omitted by F.A. 2005
9 Ins. by F.A. 2005
chemicals, pharmaceuticals, agricultural machine, ship building, boilers, compressors and any other category of industrial undertaking as the Government may by notification in the official Gazette specify.
Explanation: 'high value garments' mean overcoats, jackets and suits.
(ii) "physical infrastructure facility" means sea or river port, container terminals, internal container depot, container freight station, LNG terminal and transmission line, CNG terminal and transmission line, gas pipe line, flyover, large water treatment plant & supply through pipe line, waste treatment plant, 1[solar energy plant,] export processing zone and any other category of physical infrastructure facility as the Government may by notification in the official Gazette specify;
(iii) "tourist industry" means residential hotel having facility of three star or more and any other category of tourist industry facility as the Government may by notification in the official Gazette specify.]
(2) The exemption under sub-section (1) shall apply to the said undertaking if itfulfils the following conditions, namely:-
(a) that the said undertaking is owned and managed by-
(i) a body corporate established by or under an Act of Parliament with its head office in Bangladesh; or
(ii) a company as defined in the Companies Act, 1913 (VII of 1913) or কোম্পানী আইন, 1994 (1994 সনের 18নং আইন) with its registered office in Bangladesh and having a subscribed and paid up capital of not less than one lakh taka on the date of commencement of commercial production or operation;
2[(b) that the said undertaking is engaged in -
(i) the manufacture of goods or materials or the subjection of goods or materials to any such process, or the exploration and extraction of mineral resources and processing of agricultural products;
(ii) providing, on commercial basis, physical infrastructure facility;
(iii) tourist industry as defined in the explanation to section 46.
[Explanation.- For the purposes of this section, "physical infrastructure facility" means generation, transformation, conversion, transmission and distribution or supply of electrical energy or hydraulic power, or road, highway, bridge, airport, or the system of railway or telecommunication, or such other public facility of similar nature as may be specified by the Board in this behalf by notification in the official Gazette; ]
1 Ins. by F.O. 2007
2 Omitted by. F.A. 2005
1[ (c) that thirty per cent of the income exempted under sub-section (1) is invested in the said undertaking or in any new industrial undertakings 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 per cent of the income exempted 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:
2[Provided further that the provision for purchase of shares of a company listed with any stock exchange referred to in this clause shall not be applicable to ready made garments industry, if it re-invests forty per cent of the income exempted under sub-section (1) 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.]
(d) 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;
(e) that the said undertaking is approved, and during the relevant income year, stands approved by the Board for the purposes of this section;
(f) that the application in the prescribed form for approval for the purposes of this section, as verified in the prescribed manner, is made to the Board 3[within six months from the end of the month] of commencement of commercial production or operation.
1 Subs. by F.A. 2005
2 Ins. by F.A. 2009
3 Subs. for "within one hundred eighty days form the date" by F.A. 2000
1[(2A) Notwithstanding anything contained in this section-
(a) where a said 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
(b) 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 power price in comparison to the market price with intent to reduce the income of another undertaking or company-
the exemption of tax that said undertaking shall be deemed to have been withdrawn for that assessment year in which such transaction is made.
(3) The Board shall give its decision on an application made under clause (f) of sub-section (2) within 2[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:
3[Provided that the Board shall not reject any application made under this section unless the applicant is given a reasonable opportunity of being heard.]
(4) The Board may, on an application of any person aggrieved by any decision or order passed under sub-section (3), if the application is made within four months of the receipt of such decision or order, review the previous decision or order and pass such order in relation thereto as it thinks fit.
(5) The 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":
4[Provided that in respect of depreciation, only the allowances for normal depreciation specified in paragraph 3 of the Third Schedule shall be allowed.]
1 Subs. by F.A. 2003
2 Subs. for "three months" by F.A. 2002 again subs. for " thirty days" by F.A. 2003
3 Ins. by F.A. 2002
4 Subs. by F.A. 1999
(6) The profits and gains of the said undertaking 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 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 specified by the Board in the order issued under sub-section (3) or (4).
(7) 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; 1[and].
2[(c) any income of the said undertaking resulting from disallowance made under section 30 3 [.
[(d) dividend distribution tax under section 16D.]
(8) 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 will stand withdrawn for the relevant assessment year and the Deputy Commissioner of Taxes shall determine the tax payable for such year.
(9) Any such undertaking approved under this section may, not latter 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 orders thereon as it may deem fit.
1 Omitted by F.A. 2003
2 Ins. by F.A. 2001
3 Subs. "full-stop" for "semi colon" and omitted clause (d) by F.A. 2005
(10) 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.
(11) The Board may make rules regulating the procedure for the grant of approval under sub-section (3), review under sub-section (4) and furnishing of information regarding payment of other taxes by the said undertaking and any other matters connected with or incidental to operation of this section.
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