Imported transformer, an electrical device, would be dearer as the customs wing has withdrawn the duty-benefit on the item to support local manufacturing industries.
Transformer importers were enjoying only 2.0 per cent customs duty as capital machinery on import of the item.
A transformer is an electrical device that transfers energy between two or more circuits through electromagnetic induction.
The National Board of Revenue (NBR) issued a Statutory Regulatory Order (SRO) Wednesday by withdrawing the capital machinery benefit from the item.
From now on, transformer importers will have to pay 15 per cent Value Added Tax (VAT), 5.0 per cent Advance Income Tax (AIT) and 4.0 per cent Advance Trade VAT.
Talking to the FE, a senior customs official said the local manufacturing industries are capable to produce the transformers by importing raw materials.
"The local industries complained that import of raw materials of transformers requires payment of 30 to 35 per cent import tax while the importers are importing the item by paying at the rate of only 2.0 per cent," he said.
Md Azizur Rahman Molla, Deputy General Manager (export and marketing division) of Energypac Engineering Limited, said the local industries have to pay high duty for import of raw materials which should be cut down to facilitate the growth of technology-based industry.
Transformer needs raw materials including copper wire, silicon steel sheet and transformer oil.
He said around 45 per cent of the tax incidence is currently imposed on import of raw materials for local transformer manufacturers.
"Imported substandard transformers are causing system loss in power sector. Also, customers are being deprived of the after-sale and maintenance services," he said. Â
"Our company has the capacity to manufacture high-capacity transformers. It is exporting transformers to Nepal and India," he said.
Mr Mollah sought policy support of the government for facilitating growth of the local manufacturing industries saying that the industries are facing uneven competitions in some sectors.
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