The National Board of Revenue has waived value-added tax and supplementary duty on import of seven types of raw materials required for manufacturing sanitary napkins and diapers to protect the domestic industry and keep the two hygienic products for women and children affordable.
VAT wing of the NBR on Sunday issued a statutory regulatory order offering the benefit for two years up to June 30, 2021.
Woman rights activists and users, however, have been demanding withdrawal of VAT on sanitary napkins or pads at the retail stage to keep the price of the products affordable.
The products are not luxury ones rather most essential for women to maintain hygiene during menstruation as the rate of use of sanitary napkins is very low among women, particularly among lower- and lower middle-income groups, in the country due to high prices of the items.
Most of women in lower- and lower middle-income groups resort to using unhygienic methods during menstruation.
NBR officials said that they did not impose afresh 15 per cent VAT on sales of the products in the budget for the fiscal year of 2019-2020 that began Monday.
There was 15 per cent VAT on the products in previous years and the NBR has continued with the VAT in the budget for this fiscal year, they said.
They, however, claimed that withdrawal of VAT and SD on the import of raw materials would reduce the production cost of the products and consequently reduce the prices of the products in the local market.
According to the SRO, there will be no VAT and SD on import of re-seal/self-adhesive tape, laminated sheets, film and foil, other sheet, film and foil (printed), air laid paper, textile back sheet (ADL), elastic back ear/elastic waist band and knit loop tape by VAT-registered manufacturers.
Currently, a number of companies including Social Marketing Company, Square Toiletries Ltd, ACI Limited, Bashundhara Group and Incepta Hygiene and Hospicare Ltd are producing sanitary napkins and diapers in the country.
Local companies hold the lion share of the market of the products. According to the NBR notification, manufacturers will have to fulfil some conditions including having machinery, testing lab and minimum investment worth Tk 75 crore for getting the VAT and SD waiver.
Manufacturers will also have to ensure at least 30 per cent value addition and the number of Bangladeshi manpower should be at least 250 in each factory.
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