CA Audit Report for VAT in Bangladesh: Mandatory Under VAT Act 2012

Author: SRCO Business Insights | July 10, 2025

Recently, the VAT Circle Offices in Bangladesh are actively issuing demands for CA Audit Reports, especially covering the last five years.

This demand is not arbitrary—it’s backed by legal provisions outlined in the Value Added Tax and Supplementary Duty Act, 2012 (commonly known as VAT Act 2012), and its associated Rules and SROs.

Let’s explore the legal perspective, implications, and how businesses can stay compliant.

🔍 Legal Basis for VAT Circle Demand under VAT Act, 2012

📘 Section 107 – Maintenance of Accounts and Records

This section mandates that all VAT-registered entities must:

• Maintain proper books of accounts, vouchers, invoices, import-export documents, treasury challan, VAT return, and other relevant documents
• Preserve financial records for at least 5 years
• Produce records for audit or inspection when asked by the VAT authority

👉 Failure to maintain or produce such documents may result in penalties.

📘 Section 90 – Audit by VAT Authorities

This allows the Commissioner or DG or an authorized officer to:

• Conduct a detailed audit
• Demand certified audit reports prepared by a Chartered Accountant
• Compare turnover, input-output, and tax compliance using external evidence (like bank statements)

📘 Section 90(ka) – Submission of Audit Reports

As per the VAT Act, all VAT registered Limited Companies are required to:

• Submit a CA-certified audit report annually (within 6 months)

✅ This legal requirement empowers VAT Circle Offices to demand retrospective reports, especially if no reports were submitted earlier.

🤖 Why is the Notice Serious?

Failure to comply may lead to:

• Assessment under best judgment basis by the VAT authority
• Imposition of additional VAT, Supplementary Duty, or penalties
• Temporary suspension of VAT rebate or cancellation of Business Identification Number (BIN)
• Cessation of documents by VAT authority
• Company maybe sealed by VAT authority

 

What Should You Do Immediately?

Step 1: Collect and Review the Notice Carefully

Identify the assessment year(s), missing documents, and legal references mentioned.

Step 2: Engage a NBR Certified VAT Consultant or Chartered Accountant

A professional will help you:

• Prepare/reconstruct the missing audit reports
• File the DVS (Document Verification System) report if not already done
• Reconcile Mushak 9.1 returns with financials
• Draft a proper reply to the VAT Circle Office

 

🛡️ Why You Need an NBR Certified VAT Consultant or CA Firm

Handling a VAT Circle Demand notice under the VAT audit system isn’t just about providing papers—it requires accurate compliance, explanation, and often negotiation with the VAT office.

At S. Rahman & Co., our team of expert Chartered Accountants and NBR Certified VAT Consultants can help you:

•       Preparing backdated CA audit reports for up to 5 years
•       Reconciling VAT and financial data to avoid fines
•       Drafting responses to VAT notices and show-cause letters
•       Representing clients at the VAT Appellate Tribunal

 

We are enlisted and certified by NBR, Tax and VAT Commissionerates, making us fully compliant to represent and support your business.

 

If you’re facing a similar situation, don’t delay — VAT authorities often act fast once the notice is served.

 

Let our NBR Certified VAT experts take care of your compliance worries, so you can focus on growing your business.

 

Explore how SRCO’s expertise in audit, accounting, and advisory services can empower your business. Contact us today for tailored financial insights and strategic guidance.

 

📍 Contact Us Today

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