Summit LNG gets tax waiver for 15 years

National Board of Revenue (NBR) has offered a set of tax benefits to Summit LNG Terminal Co (Pvt) Ltd, including tax waiver for 15 years on its income.

The company will also enjoy tax exemption on interest amount of foreign loan, royalties, technical know-how fees, and technical assistance fees for the period.

NBR also exempted Summit LNG from payment of tax on capital gain derived from share transfer within 15 years of its commercial operation.

In a Statutory Regulatory Order (SRO), dated October 27, 2018, NBR extended the tax benefit for 15 years.

Earlier, in a SRO on March 4, 2018, the tax authority offered the exemption for five years, starting from the date of commercial production from its liquefied natural gas (LNG) floating storage and regasification unit (FSRU).

The tax benefit for the company is considered to be valid with retrospective effect from March 5, 2018, the relevant date of the project, and will continue up to 15 years from the date of commercial production.

Talking to the FE on Wednesday, NBR Chairman Md Mosharraf Hossain Bhuiyan said power sector is a priority sector of the government.

"We have offered the tax benefit following plea of the industry insiders," he said.

The company is expected to start commercial operation from its LNG terminal, situated at Moheshkhali in Cox's Bazar, from March 2019.

In August 2018, Japanese Mitsubishi Corporation signed an agreement with Summit to acquire 25 per cent stake in Summit LNG.

The floating LNG terminal is being constructed on Build, Own, Operate and Transfer (BOOT) basis under Speedy Supply of Power and Energy Act (special rules) 2010.

The FSRU will have LNG storage capacity of 138,000 cubic metres with regasificaiton capacity of 500 million cubic feet per day (mmcfd).

The country's first LNG terminal was set up by the US-based Excelerate Energy Bangladesh Ltd.

NBR also offered tax benefit to the company that already started supply of LNG from its FSRU, located at Moheshkhali in Cox's Bazar, to national pipeline from September.

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