VAT on import of MS rods likely
Thursday, 30 April 2009
FE Report
The government is likely to impose value added tax (VAT) on the import of mild steel (MS) rods to protect the local re-rolling mills.
A senior official at VAT wing of the National Board of Revenue told the FE Wednesday that they had been working to issue an immediate statutory regulatory order in this connection.
"We expect to issue an SRO slapping a 15 per cent VAT on the import of steel products from Thursday (today) or early next week," said the NBR official.
Presently there is no VAT but only a 7.0 per cent import duty imposed on imported rods.
Earlier, in the middle of 2008, the caretaker government abolished VAT and reduced duty to 7.0 per cent from 25 per cent to facilitate real estate and construction sectors when the price of MS rod reached an astronomical high.
NBR official, however, said the government would not raise duty on the import of steel products.
The NBR took this move following import of steel products from Turkey, as the price of the same drastically fell in the international market mainly because of the global financial crisis.
A number of re-rolling mills have started importing finished MS rods taking the advantage of its cheap price and favourable import environment and they opened letters of credit (LCs) for purchase of 62000 tonnes of rods.
However, over 20,000 tonnes MS rod imported by GPH Ispat has been delivered and it is likely to reach the market in a couple of days, importer said.
Md Bashir Ullah, general secretary of Bangladesh Steel Mills owners Association told the FE: "There is no alternative but to slap VAT and raise import duty on the import of rods to save the local re-rolling mills."
"The government did wrong for over one year by waiving VAT on the import of rods, as we have been paying 15 per cent at production stage," Bashir added.
Md Jahangir Alam, importer of the first consignment of rods, said he imported rods for smooth supply to his customers, as he faced troubles in producing MS rods owing to frequent outage of electricity.
"I imported the rods to continue smooth supply to my dealers, it is not for making any extra profit," he added.
Bangladesh has around 300 steel plants including nearly 100 steel factories and they are meeting local demand worth 2.0 million tonnes a year.
The government is likely to impose value added tax (VAT) on the import of mild steel (MS) rods to protect the local re-rolling mills.
A senior official at VAT wing of the National Board of Revenue told the FE Wednesday that they had been working to issue an immediate statutory regulatory order in this connection.
"We expect to issue an SRO slapping a 15 per cent VAT on the import of steel products from Thursday (today) or early next week," said the NBR official.
Presently there is no VAT but only a 7.0 per cent import duty imposed on imported rods.
Earlier, in the middle of 2008, the caretaker government abolished VAT and reduced duty to 7.0 per cent from 25 per cent to facilitate real estate and construction sectors when the price of MS rod reached an astronomical high.
NBR official, however, said the government would not raise duty on the import of steel products.
The NBR took this move following import of steel products from Turkey, as the price of the same drastically fell in the international market mainly because of the global financial crisis.
A number of re-rolling mills have started importing finished MS rods taking the advantage of its cheap price and favourable import environment and they opened letters of credit (LCs) for purchase of 62000 tonnes of rods.
However, over 20,000 tonnes MS rod imported by GPH Ispat has been delivered and it is likely to reach the market in a couple of days, importer said.
Md Bashir Ullah, general secretary of Bangladesh Steel Mills owners Association told the FE: "There is no alternative but to slap VAT and raise import duty on the import of rods to save the local re-rolling mills."
"The government did wrong for over one year by waiving VAT on the import of rods, as we have been paying 15 per cent at production stage," Bashir added.
Md Jahangir Alam, importer of the first consignment of rods, said he imported rods for smooth supply to his customers, as he faced troubles in producing MS rods owing to frequent outage of electricity.
"I imported the rods to continue smooth supply to my dealers, it is not for making any extra profit," he added.
Bangladesh has around 300 steel plants including nearly 100 steel factories and they are meeting local demand worth 2.0 million tonnes a year.