38. Supply of prepaid telecommunications products or services.—

(1) Where a telecommunications supplier supplies a prepaid telecommunications product or a service at a discount to a telecommunications intermediary, the consideration for such a supply shall be assessed inclusive of the discount:

Provided that in relation to a supply of telecommunications product or service by one supplier to another, the provision of sub-section (2) shall not be applicable.

(2) Where a telecommunications intermediary buys and on-sells a prepaid telecommunications product‚ such sale shall not be treated as a taxable supply.

(3) Where a telecommunications supplier supplies a prepaid telecommunications product or a service through its agent, the consideration for such a supply by the telecommunications supplier shall be assessed inclusive of the commission paid to such agent.

(4) The distribution of a prepaid telecommunications product by a telecommunications supplier or by a telecommunications intermediary acting as an agent of another telecommunications intermediary, shall not be treated as a taxable supply under this Act.

(5) A telecommunications supplier who supplies a prepaid telecommunications product and pays VAT in compliance with the provisions of this section may claim a decreasing adjustment‚ if—

(a)  the face value, in part or in full, of the product is used to purchase something from a person other than the telecommunications supplier;

(b) the other person—

(i) makes the supply through an economic activity carried on in Bangladesh; or

(ii) is registered; and

(c) the telecommunications supplier pays an amount of money to such other person in respect of such a supply.

(6) The amount of the decreasing adjustment shall be equal to the tax-fraction of the amount paid to that other person‚ and the adjustment shall be made in the tax period in which the payment is made.

(7) The Board may frame rules prescribing the means of a proof of a right to an input tax credit and the manner of claiming tax credit thereof for a person who uses a prepaid telecommunications product or a service.

Explanations: In this section‚—

(a) “prepaid telecommunications product” means a phone card, prepay card, recharge card, or prepayment for acquisition of telecommunications goods by other means, or airtime for telecommunications services, in whichever form or by whatever name called, including internet access time, or download capacity;

(b) “telecommunications intermediary” means a person who acts as a distributor, representative, VAT agent, or an intermediary in relation to a prepaid telecommunications product;

(c) “telecommunications supplier” means a supplier of telecommunications services, but does not include a telecommunications intermediary; and

(d) “telecommunications service” means a service relating to transmission, emission, or reception of signals of writings, projection of images, sounds, or information of a similar kind by wire, radio, optical, or other similar electromagnetic or electronic signalling system,—

And the following would also be included in it, namely,—

(i) such transfer or assignment service of the right to use capacity for such transmission, emission, or reception of signals; and

(ii) the service containing the provision of access to global or local information networks;

but does not include the service of supply of underlying writings, images, sounds, or information.