The National Board of Revenue has further slashed the value-added tax on mild steel products and a number of raw materials for steel sector to keep the prices of steel products stable and affordable.
It also reduced the VAT on production of cement sheet to 5 per cent and credit rating agency service to 7.5 per cent from previous 15 per cent.
The NBR has also cut down the supplementary duty on bidi by 5 per cent as an unprecedented move in contrast against its previous stance of eliminating of tobacco products, particularly bidi, by increasing duty on the products as well as the government’s policy of attaining a tobacco free country by 2040, said officials.
VAT wing of NBR on Sunday issued three separate statutory regulatory orders reducing the VAT and SD on the products.
The revenue board reduced the specific VAT at trading stage to tk 500 per tonne of MS products including rod from previous Tk 1,000 per tonne considering the negative impact on steel and construction industry.
Specific VAT for MS product produced from local or imported re-rollable scrap was Tk 1,200 per tonne while VAT rate was Tk 2,000 per tonne for ingot/billet produced from meltable scrap and MS product produced from ingot/billet.
The government on June 29 in the finally approved budget for the fiscal year 2019-2020 reduced the VAT from the proposed up to Tk 2,000 per tonne.
Now, the NBR further slashed the VAT following demand of industry insiders to reduce the cost of production as well as keep the prices of the products affordable to consumers, officials said.
The new measure would be applicable on local sales of MS rod, billet, ingot and other products, they said, adding that steelmakers were demanding to reduce the VAT on steel products.
The revenue board also set specific VAT on production of ferro-manganese, ferro-silico-manganese alloy and ferro-silicon alloy, which were raw materials for steel industry.
Previously, VAT at the rate of 5 per cent was applicable on the products.
Now, there would be specific VAT at Tk 1,000 per tonne of ferro-manganese, ferro-silico-manganese alloy and Tk 1,200 per tonne of ferro-silicon alloy, according to a SRO.
NBR took the move to reduce the VAT incidence on the products as 5 per cent VAT on prices of per tonne increase the cost of production of steel products.
The tax authorities also reduced SD on bidi produced manually and using machine to 30 per cent from previous 35 per cent mainly following huge lobbying by a group of parliament members and pressure from bidi manufacturers.
More than 50 MPs during the budget preparation stage and after the budget sent demi-official letters to the revenue board and the finance ministry recommending for not increasing the duty on bidi arguing that increasing taxes on the sector would affect poor bid workers.
Bidi workers have also been demanding reduction of the duty.
Officials said revenue collection from the sector had also been falling in the current fiscal year due to duty evasion after the hike in SD.
Bidi manufacturers and workers’ association assured that the incidence of duty evasion would decline if the rate of SD was reduced, they said.
The government in the budget for FY20 passed in parliament in June 29 increased the SD on bidi to 35 per cent from that of 30 per cent for last FY19.
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