National Board of Revenue has decided to review the existing duty structure on import of sugar following a proposal of Bangladesh Sugar and Food Industries Corporation.
In this regard, NBR is going to hold a meeting on Thursday with representatives of industries ministry, commerce ministry and Bangladesh Tariff Commission to analyse the necessity of increasing customs duty on import of sugar.
Industry insiders, however, apprehend that prices of sugar and sweetener items may go up if import duty is increased.
Prices of sugar went up significantly in 2015 when NBR separately imposed regulatory duty and VAT on import of the item, they mention.
BSFIC, a state-owned corporation under industries ministry, has recently sought increased duty on import of both raw and refined sugar to ‘protect’ the local sugar mills from losses.
It will be difficult for the state-owned 15 sugar mills to survive without increased import duty as the price of sugar in international market has been falling over the last few months, BSFIC argues.
An increase in the duty is also necessary to protect the interest of local sugarcane farmers, it says, adding that the sugar mills have large amount of stock of unsold sugar.
The price of sugarcane has also increased to Tk 3,500 per tonne in the current year from Tk 3,125.
Officials said that the NBR would review the current local and international prices, BSFIC stock of unsold sugar, relevance of duty hike and its impact on the price of sugar in local market at the meeting and would make a decision in this connection.
The NBR for the last time in 2015 imposed 20 per cent regulatory duty on import of sugar.
Currently, specific customs duty at a rate of Tk 2,000 per tonne and Tk 4,500 per tonne is applicable on import of raw and refined sugar respectively along with 20 per cent RD, 15 per cent value-added tax and 5 per cent advance trade VAT.
The price of sugar in domestic market is also falling.
According to Trading Corporation of Bangladesh, price of sugar dropped by 9.48 per cent year-on-year to Tk 50-Tk 55 per kilogram on September 2, 2018 from Tk 56-Tk 60 per kg a year ago.
The price was Tk 55-Tk 58 a kg a month back.
According to data of International Sugar Organisation, the price of white sugar also dropped to $323 per tonne in August 30 from $366 per tonne in March 1 in international market.
Some major sugar producing countries like India and South Africa have also increased duty on import of sweetener to safeguard the local mills.
According to BSFIC, it has targeted to produce 85,000 tonnes of sugar in the current fiscal year 2018-2019 against actual production of 69,000 tonnes in last FY 2017-2018.
Up to March, around 90,000 tonnes sugar was unsold.
Industry people say that an increase in import duty will result in the price hike of sugar and other sugar-made items.
BSFIC provides a small portion of annual demand for 15 lakh tonnes of sugar, they say.
More than 90 per cent of total sugar demand is met by private sugar mills which mostly import raw sugar.
In 2015, the price of sugar rose on an average by Tk 10-Tk 15 per kg from Tk 40 a kg after imposition of RD and VAT.