Glossary

Accounting, VAT and trade terms used in Bangladesh

72 terms that owners, accountants and managers meet in NBR returns, import files and day-to-day bookkeeping, explained in plain English. Where a rate, threshold or penalty changes over time we describe how it works and leave the number out, so always confirm the current NBR rule before you act.

A

Accounts payableAP, creditors: Money your business owes to suppliers for goods or services already received but not yet paid. Tracking it by supplier and due date helps you pay on time, avoid duplicate payments and see your short-term obligations at a glance.Accounts payable in eSolverBooks
Accounts receivableAR, debtors: Money customers owe you for goods or services already delivered. Ageing the balances (current, 30, 60, 90 days and older) shows who is late and where cash is stuck.Accounts receivable in eSolverBooks
AITAdvance Income Tax: Income tax collected in advance at certain transaction points, such as at the import stage, and later adjusted against the taxpayer's final income tax liability. Which transactions attract AIT and at what rate is set by NBR and changes, so confirm the current rule before applying it.Withholding tax tracking
Audit trail: A record of who created, changed or deleted a transaction and when. A reliable audit trail lets auditors and owners trace any figure back to the entry behind it and shows who approved what.Audit trail and role-based access

B

Back-to-back LCBTB LC, back-to-back letter of credit: A letter of credit opened to import raw materials, backed by an export LC the exporter has already received from the overseas buyer. It is the standard route for garment and other export-oriented manufacturers to import inputs, and the BTB LC liability is settled from export proceeds.Import and LC management
Bank reconciliation: Matching the bank lines in your books against the bank statement so that differences, such as uncleared cheques, bank charges or deposits in transit, are identified and explained. It is the main check that your cash figure is real.Bank reconciliation
BEFTNBangladesh Electronic Funds Transfer Network: The electronic bulk-payment and collection system run through Bangladesh Bank, commonly used for batch supplier payments and recurring collections between bank accounts. Transfers settle in batches rather than instantly, so book them against the bank account and reconcile when the credit appears.Reconciling bank transfers
Bill of entryB/E: The customs declaration an importer (usually through a C&F agent) files to clear imported goods. It lists the goods, their value and HS codes and the duties and taxes assessed, so it is the main document for working out the landed cost of an import.How to calculate import landed cost
Bill of materialsBOM: The list of raw materials, components and quantities needed to make one unit of a finished product. A BOM is the basis for production orders, material issue, costing and planning how much to buy.Manufacturing and production
BINBusiness Identification Number: The 13-digit number issued to a business registered for VAT. It appears on Mushak invoices and returns, and your suppliers and customers use it to verify and claim VAT on transactions with you.Mushak and VAT returns
bKashMFS (mobile financial services): A widely used Bangladeshi mobile wallet, common among customers, small suppliers and field staff. Businesses record bKash receipts and payments like a bank-style account so that wallet balances and transaction charges are visible in the books.Bank and MFS reconciliation
Bonded warehouse: A customs-licensed warehouse where imported material is held without paying duty until it is used or released. Exporters such as garment manufacturers rely on it, so bonded stock needs to be tracked separately from duty-paid stock and matched to what was consumed.Warehouse and stock control
Branch accounting: Recording and reporting transactions for each outlet or branch so you can see sales, expenses and profit per location as well as for the whole company. Branches usually share one chart of accounts but report separately.Cost centre and branch tracking

C

C&F agentClearing and forwarding agent: A licensed agent who clears imported goods through customs and the port on the importer's behalf, files the bill of entry and arranges onward transport. Their fees and the charges they pay for you, such as port and handling charges, are part of the landed cost of the goods.Import and letter of credit
Cash incentive: A government incentive paid to exporters of eligible products, usually as a percentage of export proceeds. Eligible products, percentages and conditions are set by government notification and change, so check the current notification; in the books it is recorded as income when it becomes receivable or received according to your accounting policy.RMG and manufacturing
Cashbook: The day-to-day record of cash received and paid out, with an opening and closing balance. Shops, offices and sites keep one to control petty cash and to prove that physical cash matches the books.Petty cash and cashbook
Challan (delivery)Delivery challan, delivery note: The document that travels with goods when they leave your warehouse, listing what was dispatched and to whom. Many Bangladeshi trading businesses raise the challan first and invoice afterwards, so stock should reduce when the challan is issued.Sales order to cash
Challan (treasury)Treasury challan, deposit challan: The payment slip used to deposit tax, VAT, VDS or TDS into the government treasury through an authorised bank or online channel. Keep the treasury challan reference, because it is the proof of deposit you attach to returns and supplier certificates.Withholding tax (VDS and TDS)
Chart of accountsCOA: The organised list of every account a business uses to record transactions, grouped into assets, liabilities, equity, income and expenses. A clear chart of accounts makes reports meaningful and is the first thing to set up in any accounting system.Chart of accounts
Commercial invoice: The seller's invoice for an international sale, stating the goods, quantities, unit prices, total value and terms. Customs uses it to assess duty on imports, and it is also a core document under a letter of credit.Import and LC management
Cost centreCost center: A department, project, branch or activity you want to measure separately for income and expenses. Tagging transactions with cost centres shows which part of the business makes money and which only consumes it.Cost centre tracking
Credit note: A document that reduces the amount a customer owes, issued for returns, price corrections or discounts after invoicing. For VAT-registered businesses it also adjusts the VAT on the original sale, and the portal produces it in Mushak-6.7 form.Tax and VAT management
Customs duty: A tax levied when goods are imported, assessed on the customs value according to the item's HS code. Along with other import taxes it is part of landed cost, and the applicable rates are set by NBR and change, so rely on the current tariff.Import landed cost explained

D

Debit note: A document that increases the amount owed, for example to correct an under-charged invoice, or that a buyer raises to return goods to a supplier. For VAT purposes the portal produces it in Mushak-6.8 form.Tax and VAT management
DepreciationFixed asset depreciation: The gradual write-off of a fixed asset's cost over its useful life, recorded as an expense each period. Whether you use straight-line or reducing balance, an asset register keeps each asset's cost, accumulated depreciation and book value.Fixed asset and depreciation
Duty drawback: A refund of customs duty and certain taxes paid on imported inputs that are later used in goods that are exported. The eligibility and procedure are set by NBR, so confirm the current scheme before claiming; the claim needs records tying imports to exports.RMG and manufacturing

E

e-TINElectronic Taxpayer Identification Number: The 12-digit taxpayer identification number issued online by NBR to individuals and organisations. It is needed for income tax returns, tax deduction certificates and many bank, trade licence and government dealings.Withholding tax
ERCExport Registration Certificate: The registration an exporter needs, issued by the Chief Controller of Imports and Exports, before it can export goods. It is usually mentioned together with the IRC, which covers imports.Import and LC management
Exempt supplyVAT-exempt: Goods or services on which VAT is not charged and, unlike zero-rated supplies, on which input VAT generally cannot be claimed back. Which items are exempt is defined in law and revised from time to time, so confirm the current schedule.Tax and VAT management
Export LCExport letter of credit, master LC: A letter of credit opened by an overseas buyer's bank in favour of a Bangladeshi exporter, promising payment when the stated shipping documents are presented. It often serves as the basis for opening back-to-back LCs to import raw materials.RMG and manufacturing

F

FIFOFirst in, first out: A stock valuation method that assumes the oldest units are sold or used first, so closing stock is valued at the most recent purchase costs. It suits goods with expiry dates or steadily rising prices and is easy to explain to auditors.Inventory management
Financial yearFiscal year, FY: The twelve-month accounting period for which a business prepares accounts. Most Bangladeshi businesses follow July to June, so FY 2025-26 runs from 1 July 2025 to 30 June 2026; closing the year locks it so balances carry forward as opening balances.Financial reports
Fixed asset: A long-life item the business uses rather than sells, such as machinery, vehicles, furniture or computers. It is recorded at cost in an asset register and depreciated over its useful life.Fixed asset and depreciation

G

General ledgerGL: The complete set of accounts holding every posted transaction, from which the trial balance and financial statements are produced. Sub-ledgers such as receivables and payables roll up into it.Chart of accounts
GRNGoods Received Note: A document recording what was actually received from a supplier, checked against the purchase order. It is the trigger for adding stock and the first check before you accept and pay a supplier bill.Procure to pay

H

HS codeHarmonized System code: The international product classification code used on customs documents. The HS code determines which duties and taxes apply to an imported item, so a wrong code can change the landed cost and cause disputes at clearance.Import landed cost explained

I

Input tax creditInput VAT rebate, rebate: The VAT you paid on purchases that you can set against the VAT you collect on sales, so you pay only the difference to NBR. It generally requires a valid VAT challan from a registered supplier and the purchase being used for taxable business activity, so keeping documents matched to purchases matters.Mushak and VAT returns
InvoiceSales invoice, tax invoice: The document that tells a customer what they owe, for what and by when. For VAT-registered businesses a VAT invoice also has to carry the details NBR requires, which is why it takes the form of the Mushak-6.3 challan.Invoicing
IRCImport Registration Certificate: The registration an importer needs, issued by the Chief Controller of Imports and Exports, before importing goods commercially. Banks usually ask for it when opening an import LC.Import and LC management

J

Journal entry: A balanced accounting record of at least one debit and one credit. Most journals are created automatically by invoices and payments; manual journals are used for adjustments, accruals and corrections.Chart of accounts

L

Lakh and croreBangladeshi number grouping: The South Asian way of grouping large numbers: 1 lakh is 1,00,000 and 1 crore is 1,00,00,000 (100 lakh). Business reports and statements in Bangladesh are normally read in this format, so amounts such as BDT 12,50,000 are clearer to owners than 1,250,000.Financial reports
Landed cost: The full cost of getting imported goods into your store: the supplier price plus freight, insurance, customs duty and other import taxes that form part of cost, C&F and port charges, and transport. Spreading these onto each item gives the true unit cost used for pricing and margin.How to calculate import landed cost
LCLetter of credit: A bank's written promise to pay a seller on behalf of a buyer once the seller presents the documents the LC requires. It is the usual way Bangladeshi importers and exporters trade with unfamiliar overseas parties.Import and letter of credit

M

MushakMushak forms: The prescribed VAT forms in Bangladesh, numbered in the 6.x series for records and challans and 9.1 for the monthly return. Common ones are Mushak-6.1 (purchase register), 6.2 (sales register), 6.3 (VAT challan) and 9.1 (monthly return).Mushak and VAT returns
Mushak-6.1Purchase register: The register of purchases that records the goods and services bought and the input VAT on each. It feeds the input tax side of your monthly return.Mushak and VAT returns
Mushak-6.2Sales register: The register of sales that records the goods and services sold and the output VAT on each. It feeds the output tax side of your monthly return.Mushak and VAT returns
Mushak-6.3VAT challan, tax invoice: The VAT challan a registered business issues when it sells taxable goods or services. It carries the seller's and buyer's details, BIN, item descriptions, value and VAT, and is the document your customer relies on to claim input tax credit.Mushak 6.3: when to issue one
Mushak-6.4Transfer challan: A form in the Mushak-6 series commonly described as the challan used when goods move between a business's own registered units or branches. Forms and their uses are revised by NBR, so confirm the current form for your situation.Mushak and VAT returns
Mushak-6.5Delivery-type challan: A form in the Mushak-6 series commonly described as a delivery challan for goods dispatched in situations outside an ordinary sales challan. Because the use of the form is defined by NBR rules, confirm the current requirement before you rely on it.Mushak and VAT returns
Mushak-6.7Credit note: The VAT credit note issued to reduce the VAT value of an earlier sale, for example after a return or price reduction. It links back to the original Mushak-6.3 and adjusts your return for the period.Tax and VAT management
Mushak-6.8Debit note: The VAT debit note issued to increase the VAT value of an earlier sale, such as when the original price was understated. It links back to the original Mushak-6.3 and adjusts your return for the period.Tax and VAT management
Mushak-9.1Monthly VAT return: The monthly VAT return in which a registered business reports its sales, purchases, output VAT, input credit and the net amount payable. It is due by the 15th of the following month, so VAT for July is returned by 15 August.Mushak and VAT returns

N

NagadMFS (mobile financial services): A mobile wallet service used for payments and transfers alongside bKash and Rocket. Recording wallet receipts and payments as their own accounts lets you reconcile them just like a bank.Bank and MFS reconciliation
NBRNational Board of Revenue: Bangladesh's tax authority, responsible for administering VAT, income tax and customs. Its rules, forms and notifications set what your business must charge, deduct, file and keep.Tax and VAT compliance

O

Opening balance: The balance of an account at the start of the period or the moment you begin using a new system. Entering accurate opening balances for bank, customers, suppliers and stock means reports are right from day one.Chart of accounts

P

PDCPost-dated cheque: A cheque dated for a future day, commonly received from customers or issued to suppliers as part of credit terms. It should be tracked as a pending instrument and recognised as cash only after it clears.Cheque and foreign exchange control
Petty cash: A small cash float kept for minor day-to-day expenses such as tea, courier or local transport. It is topped up through an imprest system and every payout needs a voucher.Petty cash and cashbook
Proforma invoicePI: A preliminary invoice that states what a seller will supply and at what price. It is not a demand for payment: importers give the PI to their bank to open an LC, and customers use it to approve a purchase.Import and LC management
Purchase orderPO: A document sent to a supplier confirming what you want to buy, in what quantity and at what price. Matching the PO to the goods received note and the supplier's bill is the basis of controlled purchasing.Procure to pay

R

RocketMFS (mobile financial services): Dutch-Bangla Bank's mobile banking service, one of the mobile wallets businesses receive money through. As with other MFS accounts, record it as its own account and reconcile it with the provider statement.Bank and MFS reconciliation
RTGSReal Time Gross Settlement: Bangladesh Bank's system for high-value interbank transfers that settle individually and immediately during operating hours. Businesses use it for large supplier payments, and the bank's confirmation becomes the reference you record in the books.Bank reconciliation

S

Stock valuation: The method used to put a taka value on inventory, usually FIFO or weighted average. The chosen method affects cost of goods sold, profit and the balance sheet, so it should be applied consistently.Inventory management
Supplementary dutySD: An additional tax charged on specified goods and services, in addition to VAT, usually on items the government wants to tax more heavily. Which items attract it and at what rate is defined by NBR schedules that change, so check the current schedule.Tax and VAT management

T

TDSTax Deducted at Source: Income tax a payer deducts from certain payments, such as supplier or contractor payments, and deposits with the government on the recipient's behalf. The payer must deposit it on time and give the recipient a certificate so the recipient can claim credit.VDS and TDS: deduction at source
TINTaxpayer Identification Number: The number that identifies a taxpayer for income tax. It is issued online as a 12-digit e-TIN and is quoted on tax returns, deduction certificates and many commercial documents.Withholding tax
Trade licenceTrade license: The licence issued by the local city corporation or municipality that permits a business to operate at its premises. It is renewed periodically and is commonly requested by banks, for tender participation and and in VAT registration dealings.Tax and VAT compliance
Trial balance: A list of every account with its debit or credit balance, used to confirm that total debits equal total credits before reports are produced. A trial balance that does not balance points to a posting error that must be found.Financial reports

V

VATValue Added Tax: A consumption tax charged at each stage of the supply chain, with the standard rate at 15%. Registered businesses collect output VAT on sales, claim input VAT on purchases and pay the difference through the monthly return.Tax and VAT management
VDSVAT Deducted at Source: A mechanism where certain buyers, such as designated entities, deduct the VAT portion from the payment to the supplier and deposit it with the government themselves. The buyer must issue a deduction certificate, which in the portal is the Mushak-6.6 certificate. Which buyers and services are covered is set by NBR, so confirm the current rule.VDS and TDS: deduction at source

W

Weighted average costWAC, average costing: A stock valuation method that recalculates the average unit cost every time new stock is received. It smooths price swings and is simple to run when items are interchangeable.Inventory management
Withholding certificateDeduction certificate: The document the payer gives a supplier to show tax or VAT was deducted at source and deposited. The supplier uses it to claim credit, so the certificate should be issued from the same record that created the deduction.Withholding tax (VDS and TDS)

Z

Zero-rated supply: A taxable supply charged at a 0% rate, such as qualifying exports. Because it remains taxable, the supplier can still claim input VAT paid on related purchases, which is the key difference from an exempt supply. Confirm which supplies qualify under current NBR rules.Tax and VAT management

This glossary is general information, not tax or legal advice. NBR rules, forms and rates are revised, so confirm the current requirement with NBR or your tax adviser.

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