Imposition of 15pc VAT irks shipping agents
Friday, 1 January 2010
Jasim Uddin Haroon
The National Board of Revenue (NBR) has imposed VAT (value added tax) on the shipping agents as a precondition for getting clearance certificate to set sail.
Shipping circles said such a stance of NBR will hamper the country's external trade extensively.
They said they are not paying VAT as the NBR lacks clear-cut guidelines on the issue for long.
The NBR wanted to impose VAT on the shipping agents in 1996 and held several meetings with container carriers in this connection.
Officials, who attended the meetings, said NBR agreed in principle to realise VAT on the basis of dead weight and not on agency commissions.
However, in the letter issued on December 17, the NBR said: "The shipping agents will have to pay VAT at a rate of 15 per cent on the agency commission."
Shahed Sarwar, general manager of NYK, a leading container carrier, said realisation of 15 per cent VAT on the agency commission will be a big blow to the business.
Shipping agents get 5.0 per cent commission on the export cargo from their principals and 2.5 per cent on the import cargo.
According to NBR, goods manufactured in the export processing zones, raw materials imported for export and export-oriented goods will be exempted from the purview of the VAT.
The National Board of Revenue (NBR) has imposed VAT (value added tax) on the shipping agents as a precondition for getting clearance certificate to set sail.
Shipping circles said such a stance of NBR will hamper the country's external trade extensively.
They said they are not paying VAT as the NBR lacks clear-cut guidelines on the issue for long.
The NBR wanted to impose VAT on the shipping agents in 1996 and held several meetings with container carriers in this connection.
Officials, who attended the meetings, said NBR agreed in principle to realise VAT on the basis of dead weight and not on agency commissions.
However, in the letter issued on December 17, the NBR said: "The shipping agents will have to pay VAT at a rate of 15 per cent on the agency commission."
Shahed Sarwar, general manager of NYK, a leading container carrier, said realisation of 15 per cent VAT on the agency commission will be a big blow to the business.
Shipping agents get 5.0 per cent commission on the export cargo from their principals and 2.5 per cent on the import cargo.
According to NBR, goods manufactured in the export processing zones, raw materials imported for export and export-oriented goods will be exempted from the purview of the VAT.