VAT on local LPG cylinder cut to 5.0pc
FE Report | Tuesday, 29 September 2020
Local producers of liquefied petroleum gas (LPG) cylinders will enjoy a reduced rate of VAT on its production from now on.
The National Board of Revenue (NBR) has slashed the value added tax (VAT) on the local production of LPG cylinder to 5.0 per cent from 15 per cent.
Officials said they have brought down the VAT rate in response to the demand from the local LPG industries and to facilitate its domestic production.
The VAT wing of the NBR issued a Statutory Regulatory order (SRO), dated September 24, making the VAT cut effective for 'containers for compressed or liquefied gas of iron or steel (LPG cylinder)'.
The reduced rate of VAT would remain valid until June 30 2021.
Up until fiscal year 2019-20, local production of LPG cylinder was exempted from VAT. But in the budget for current fiscal, the VAT wing did not extend the exemption.
However, 15 per cent VAT at the import stage of LPG cylinders is still in place.
Talking to the FE, a senior official of the VAT wing said that although the industry insiders demanded full waiver of the VAT on local production of LPG cylinder, the NBR imposed a nominal 5.0 per cent VAT.
There are some 15 industries, including Bashundhara, Omera and TK Group, in the country, which produce LPG cylinders locally.
Meanwhile, the VAT wing issued another SRO exempting the import of poultry and livestock feeds, such as soybean meal, corn gluten meal, rapeseed extraction, and also one-day chicken, from the payment of Advance Tax.