NBR reduces tax on some industrial, construction raw materials
Friday, 20 November 2009
Doulot Akter Mala
The National Board of Revenue (NBR) has reduced tax on some industrial and construction raw materials to escalate growth of the country's manufacturing industries and real-estate sector.
The board has reduced tariff value on production of corrugated iron (CI) sheet from hot rolled (HR) coil to Tk 18,500 from Tk 25,500 to facilitate the country's poor section of people who build low cost houses, a senior NBR official told the FE Thursday.
HR coil has diversified use in the construction industries and manufacturing sector. Cold rolled (CR) coil, galvanised plain sheet and CI sheet are sub-products of HR coil, a basic raw material of tin, window, door, steel almirah, ceiling fan, tube light box etc.
The NBR has split the tariff values on every stage of production of CR, GP or CI sheet from HR. Value Added Tax (VAT) Department of the NBR has issued a statutory regulatory order (SRO) last week imposing the new tariff value.
The NBR has imposed the new reduced tariff after five leading manufacturing companies requested the NBR to review the value, the official said.
"We have found that some companies have been producing GP sheet and CI sheet directly from HR coil. For those companies, the NBR has set the tariff values to resolve confusion over payment of tax."
In an investigation, the NBR has found that some companies are only producing HR coil to CR or CR to GP, while other companies have the machinery to produce CI sheet directly from HR, he said.
The NBR has fixed different tariff values to create a level-playing field for those companies who have to pay more tax for not having the facilities to produce CI sheet directly from HR coil.
PHP, Chemon Ishpat, S Alam Steels, Apollo Ishpat and Galco Steel have requested the NBR to review the tariff value, as they are facing uneven competition in the market, he said.
In 2004, the NBR slapped tariff values in three stages of production starting from HR coil to CI coil. In the recent SRO, the board has split it into five stages. Tax for production of CR coil from HR coil remains the same at Tk 10,000 per tonne.
Tariff value at production stage of GP (galvanised plain) sheet from CR coil has been lowered to Tk 8,000 per tonne from Tk 15,000 per tonne. VAT on production of CI sheet from CR coil has been reduced to Tk 8,500 from Tk 15,500 per tonne.
In the SRO, the NBR has included other two tariff rates on production of GP sheet and CI sheet directly from HR coil. Tariff value is set Tk 18,000 per tonne on production of GP sheet and Tk 18,500 for CI sheet from HR coil.
The country imports HR coil as a basic raw material and produce CR coil, GP sheet and CI sheet from it. Industry insiders said the country imports HR coil worth Tk 10 billion per year for industrial production and construction purposes.
The National Board of Revenue (NBR) has reduced tax on some industrial and construction raw materials to escalate growth of the country's manufacturing industries and real-estate sector.
The board has reduced tariff value on production of corrugated iron (CI) sheet from hot rolled (HR) coil to Tk 18,500 from Tk 25,500 to facilitate the country's poor section of people who build low cost houses, a senior NBR official told the FE Thursday.
HR coil has diversified use in the construction industries and manufacturing sector. Cold rolled (CR) coil, galvanised plain sheet and CI sheet are sub-products of HR coil, a basic raw material of tin, window, door, steel almirah, ceiling fan, tube light box etc.
The NBR has split the tariff values on every stage of production of CR, GP or CI sheet from HR. Value Added Tax (VAT) Department of the NBR has issued a statutory regulatory order (SRO) last week imposing the new tariff value.
The NBR has imposed the new reduced tariff after five leading manufacturing companies requested the NBR to review the value, the official said.
"We have found that some companies have been producing GP sheet and CI sheet directly from HR coil. For those companies, the NBR has set the tariff values to resolve confusion over payment of tax."
In an investigation, the NBR has found that some companies are only producing HR coil to CR or CR to GP, while other companies have the machinery to produce CI sheet directly from HR, he said.
The NBR has fixed different tariff values to create a level-playing field for those companies who have to pay more tax for not having the facilities to produce CI sheet directly from HR coil.
PHP, Chemon Ishpat, S Alam Steels, Apollo Ishpat and Galco Steel have requested the NBR to review the tariff value, as they are facing uneven competition in the market, he said.
In 2004, the NBR slapped tariff values in three stages of production starting from HR coil to CI coil. In the recent SRO, the board has split it into five stages. Tax for production of CR coil from HR coil remains the same at Tk 10,000 per tonne.
Tariff value at production stage of GP (galvanised plain) sheet from CR coil has been lowered to Tk 8,000 per tonne from Tk 15,000 per tonne. VAT on production of CI sheet from CR coil has been reduced to Tk 8,500 from Tk 15,500 per tonne.
In the SRO, the NBR has included other two tariff rates on production of GP sheet and CI sheet directly from HR coil. Tariff value is set Tk 18,000 per tonne on production of GP sheet and Tk 18,500 for CI sheet from HR coil.
The country imports HR coil as a basic raw material and produce CR coil, GP sheet and CI sheet from it. Industry insiders said the country imports HR coil worth Tk 10 billion per year for industrial production and construction purposes.