A blanket waiver of value-added tax (VAT) is given in government bid to make pricey essentials affordable as Ramadan business binge further heats up the market.
The National Board of Revenue (NBR) waived VAT, partially, on a slew of essential commodities like overpriced edible oils, flour, Ata and lentils to keep the market stable during the holy month of Ramadan.
On the waiver list are also biscuits, salt, and various pricey spices.
This exemption applies at the production level for some products and at the business level for others.
On Monday, the NBR issued a Statutory Regulatory Order waiving the all-encompassing tax-VAT-that any consumer, be they rich or poor, of products and services have to pay.
According to the NBR notification, VAT exemption will be applicable at the production level for rapeseed oil, colza-seed oil, and canola oil until June 30, 2025. Mustard oil will also be exempt from VAT at the production level, but no time limit has been specified for this exemption.
Additionally, VAT at the business level has been waived for domestically produced goods such as biscuits, salt, flour, wheat flour, semolina, chili powder, coriander, turmeric, ginger, rice-bran oil, sunflower oil, rapeseed oil, colza-seed oil, canola oil, lentils, and other leguminous food-grains. There were 5.0-percent VAT at business stage on these items.
VAT at production stage of spices remains 5.0 per cent while the NBR has lifted 7.5-percent VAT at trading stage.
For rapeseed, colza and canola oils, there was 7.5-percent VAT at trading stage which has been waived until June 30, 2025.
VAT at production stage of biscuits remains unchanged at 7.5 per cent while 7.5-percent VAT at trading stages has been waived.
Conditional VAT exemptions have also been granted for LP gas and natural gas at the business level. However, businesses that import and sell directly to consumers will not be eligible for this exemption.
To avail of these tax benefits, businesses must meet several conditions, including VAT registration, issuing invoices, maintaining all types of registers, and submitting monthly VAT returns.
Talking to the FE, Barrister Bodruzzaman Munshi, second secretary at the VAT policy wing of the revenue board, said the tax has been waived at businesses stage and manufacturing stage for several items.
"Our goal is to facilitate the consumers through VAT exemption during Ramadan. Except biscuit and spices, we have exempted all essential commodities, including edible oils, Ata, flour fully."
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