VAT waived for export cos

Export-oriented companies would enjoy value-added tax (VAT) waiver on transfer of capital machinery and spare parts on three conditions, one of which is that both of the companies must have valid bond licences, according to a new General Order (GO) issued by the VAT wing of the National Board of Revenue (NBR) on Wednesday.

It was a long-awaited demand from the exporters to waive the 5.0 per cent value-added tax (VAT) on transfer of capital machineries from one company to another.

Md Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said exporters demanded the tax break as they found it unjust.

"Many of the exporting industries have been compelled to shut their operation, but transfer of capital machinery from those industries became difficult due to this VAT," he added.

Mr Hatem has urged the NBR to allow exporters enjoy the tax break on 'retrospective effect' as many have been struggling with such audit objections.

In the GO, along with the condition of having bonded warehouse licence, the NBR also tagged two other conditions to avail the tax-break facility, signed by Md Badruzzaman Munshi, second secretary of the VAT policy wing.

Export-oriented companies have to apply to the VAT commissioner for transfers by submitting necessary documents and VAT returns of both the companies must have the details of the capital machinery and spare parts, according to the GO.

Around 3000 export-oriented companies have bonded warehouse licence to import raw materials without paying duty taxes.

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