VAT waiver likely on collection of waste cotton, jhut
Kamal may propose many other changes in tax measures in budget for FY '24
DOULOT AKTER MALA | Monday, 29 May 2023
The government may offer tax benefits to the local textile spinning mills on collection of waste cotton and jhut (clips) for production of recycled fibre in the upcoming budget for fiscal year 2023-24.
Currently, there is a 15 per cent VAT on supply and sales of cotton and jhuts. The government may propose 7.5 per cent VAT waive at the supply stage in the budget, sources said.
Industry insiders said the partial waiver may not help the sector flourish and tap the potentials.
Finance Minister AHM Mustofa Kamal may propose the waiver while placing the budget for FY 2023-24 on June 1, 2023.
The government may also phase out tax benefits on two sectors - ballpoint pen manufacturing and software development and customization - and likely impose 15 per cent and 5.0 per cent tax respectively.
The specific duty on imports of clinker for cement manufacturing might go up for both industrial and commercial importers while tax benefit on import of construction materials for hotels may be scrapped.
VAT might be imposed on non-fortified basmati rice imports. Imports of sandwich panels might also be costlier.
The tax benefit on blender, juicer, pressure cooker, washing machine, microwave oven, electric oven, ICT and computer, active pharmaceutical ingredients, refrigerator, sanitary napkin, diaper, soap, shampoo, biscuit, and cattle feed would be widened and extended.
From the upcoming FY, businesses would not be able to claim tax rebate on purchase of vehicles as inputs.
Production of artificial fibre, optical fibre cable, medicine for malaria, tuberculosis and aircraft lease rent would enjoy tax benefit.
VAT on production of liquefied petroleum gas (LPG) cylinders would be increased to 7.5 per cent from existing 5.0 per cent.
Also, all types of plastic table wares, kitchenware, toilette products, kitchen towel, aluminium household or sanitary ware and brick would be subject to pay 7.5 per cent VAT from existing 5.0 per cent.
Aircraft engine, turbo engine, aircraft spare parts, agriculture machinery, all types of containers, drinking water distillation plants operated by solar power would enjoy waiver from Advance Tax.