Customers of gold, silver now paying reduced VAT

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Sonia H Moni The government has reduced the net value added tax (VAT) from 4.5 per cent to 2.0 per cent on gold, gold ornaments, silver and silver ornaments. National Board of Revenue (NBR) has issued a Statutory Regulatory Order (SRO) in this regard on December 4. Bangladesh Jewellers Samity (BJS) president Dilip Roy told the FE, "The government has recently decreased the rate of net VAT from 4.5 per cent to 2.0 per cent on gold and silver ornaments, which is an achievement for the local jewellery businessmen." He said, "The customers usually pay the net VAT for buying gold and silver ornaments. The clients will now have to pay Tk 2000 as net VAT to buy gold, silver and other ornaments worth Tk 100,000, as per the recently reduced rate of 2.0 per cent." "But they earlier had to pay Tk 4500 to buy gold, silver and other ornaments worth Tk 100,000, according to the previous rate of net VAT 4.5 per cent. The customers were not willing pay VAT at 4.5 per cent." Appreciating the initiative of the government, Dilip Roy said: "The customers were not interested to pay the net VAT at 4.5 per cent and were paying it a rate of 1.5 per cent as per the old rate of the net VAT, which remained in effect till June 2011." "If the net VAT was not reduced, the jewllery shop owners were to pay annually an amount three times higher than the newly reduced VAT from his personal account, which could cause a big trouble to us," said Mr Roy. Bangladesh Jewellers Samity general secretary Dewan Aminul Islam Shahin said, "The reduced rate of net VAT will help to increase the rate of gold sales. We are expecting that the jewellery business in our country will get rid of the current bleak situation." The present gold prices are: 22-carat Tk 56,103 per bhori, 21-carat Tk 53,596, 18-carat Tk 45,956 and the traditional gold Tk 34,992 per bhori, and silver per bhori Tk 1691, according to the traders of local market. The BJS president said "We have already urged the jewellery shop owners to tell the buyers about the importance of paying VAT that finally goes to the government exchequer." He added: "Already we have formed monitoring teams to check on the VAT collection properly in each of the jewellery shops in the capital."