(1) Where a bank or ²[a finance company] extends any credit facility under a local letter of credit or any other financing agreement, not being a financing arrangement under sub-section (2), for purchasing any goods in Bangladesh by a person hereinafter referred to as “Person A” from any person, hereinafter referred to as “Person B”, for the purpose of trading, or of reselling after process or conversion, in that case the bank or ³[finance company] shall, at the time of paying or crediting to Person B, deduct tax at the rate of 3% (three percent) of the amount so paid or credited in relation to the purchase by Person A.

(2) Where a bank or ⁴[finance company] extends any credit facility to a distributor under a financing arrangement in which a person, hereinafter referred to as “Person C”, receives payments from such bank or the ⁵[finance company] against the invoice or sale of goods to its distributor, hereinafter referred to as “Person D”, in that case, the bank or ⁵[finance company] shall, at the time of paying or crediting payment to Person C, deduct tax at the rate of 1% (one percent) of the amount so paid or credited in relation to the goods invoiced to Person D.

⁶[(3) Where a bank or finance company is engaged in opening or making of local letter of credit or any other financing agreement for the purchase or procurement of all kinds of fruits and computer or computer accessories, in that case such bank or finance company shall deduct tax at the rate of 2% (two percent) on the amount of payment or the amount of local letter of credit.]

⁷[(4) Where a bank or finance company is engaged in opening or making of local letter of credit or any other financing agreement for the purchase or procurement of rice, wheat, potato, onion, garlic, peas, chickpeas, lentils, ginger, turmeric, dried chillies, pulses, maize, coarse flour, flour, salt, edible oil, sugar, black pepper, cinnamon, cardamom, clove, bay leaf, jute, cotton and yarn, in that case such bank or finance company shall deduct tax at the rate of 1% (one percent) on the amount of payment or the amount of local letter of credit.]

Explanation.—For the purpose of this section, “distributor” means a person who performs the function of supply of finished goods produced by another person to the end customer directly or through any other intermediary.