The commerce ministry has requested the National Board of Revenue to withdraw VAT and duties imposed additionally in the current fiscal year 2019-2020 on import of crude edible oil and raw sugar to keep prices and supply of the two essential consumer goods stable.
The ministry in a letter to the NBR chairman on Tuesday said that the prices of the two products were going up in the country’s kitchen markets due to the increased VAT and duties.
The prices of the products are also in upward trend on the international market, it said.
The additional taxes should be withdrawn to keep the prices stable and affordable on the market, particularly during the upcoming Ramadan when the consumption of the products goes up, it said.
The revenue board in the budget imposed 15 per cent VAT at the import and production stages along with 5 per cent advance tax on import and 5 per cent VAT on supply or sales of crude soya bean and palm oil.
In the last fiscal year of 2018-2019, there was no VAT on production and sales as the 15 per cent VAT was to be collected only at the import stage. There was no AT on import of the products either.
The NBR in the budget also increased specific duty on import of raw sugar to Tk 3,000 per tonne from the previous amount of Tk 2,000 and increased supplementary duty to 30 per cent from the previous rate of 20 per cent. It also imposed 5 per AT and 5 per cent advance income tax on the import of raw sugar.
In case of crude edible oil, the commerce ministry made several alternative proposals related to taxes.
The NBR may impose 15 per cent VAT only at the import stage and withdraw the other taxes like in the previous year or it may impose specific duty on import of crude edible oil at Tk 15,000 per tonne and withdraw all other taxes.
It also proposed the withdrawal of 5 per cent VAT on production of local mustard oil which is also widely used in cooking.
In case of raw sugar, the ministry proposed three alternative proposals to keep the prices stable.
According to the ministry, the NBR may either reinstate the previous tax structure or withdraw the AT and AIT on import or impose specific duty on import of the product at the rate of Tk 15,000 per tonne.
Officials of the revenue board said that they had yet to get the proposal.
They will make a decision in this regard as per the instruction of the government high ups, they said.
According to the Trading Corporation of Bangladesh, the price of unpacked soya bean oil had increased by 13.58 per cent to Tk 93 a litre in a year while the price of palm oil had increased by 28.57 per cent to Tk 85 a litre.
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