Country's sugar refiners have sought VAT (value added Tax) waiver so that they can market their imported sugar at a fair price as they have been facing losses in the wake of the Covid-19 pandemic, industry insiders have said.
On July 07, 2020, Bangladesh Sugar Refiners Association (BSRA) requested the National Board of Revenue (NBR) to take required steps in this regard.
When contacted, BSRA general secretary Golam Rahman said no VAT is applicable to Bangladesh Sugar and Food Industries Corporation. But private sector producers have to pay VAT at the import level of sugar.
He, however, said it should be justified to help the private sector sugar refiners stay in the market.
Currently, some 15 per cent value added tax (VAT) is applicable to the import of the item.
When contacted regarding the issue, first secretary (VAT policy) of NBR Kazi Farid Uddin said there was no development on the VAT waiver sought by the BSRA.
The refiners purchased raw sugar at higher prices from the international market in early March to fight any possible crisis of the sweetener in future, they added.
They mentioned that demand for sugar in the local market declined due to the spread of coronavirus pandemic. So, they are incurring losses as far as processing and marketing are concerned.
After processing raw sugar bought at higher prices, it has become impossible to pay electricity and gas bills to the utility service providing agencies regularly after June last.
Currently, there are 15 state-run sugar mills and five private-owned sugar refineries in the country.
The traders concerned export sugar after meeting the country's demand, according to the BSRA.
Currently, daily production capacities of the private refineries are 10,200 tonnes.
The state-owned sugar mills produce 0.22 million tonnes of sugar annually.
Both the state-run sugar mills and private refiners produce nearly 3.90 million tonnes of sugar in a year.
The volume of investment of the state mills is approximately Tk 200 billion while the investment is Tk 150 billion made by the private refineries, read the association letter.
Presently, over 38,000 people are engaged in the country's sugar industry indirectly.
In February last, prices of raw sugar increased significantly in the global market. We had been informed by the ministry concerned and other sources that world markets may face a huge shortage of raw sugar and increase prices of such sugar, according to the association.
For this, to keep the domestic market stable, the refiners have purchased raw sugar at higher prices for importing, according to the association letter.
Currently, import duty (specific duty) of raw sugar is Tk 3,000.
However, 30 per cent regulatory duty (RD) is applicable to the import duty of sugar. Earlier, it was 20 per cent.
In addition, the government imposed 5.0 per cent AIT and 5.0 per cent AT in the last national budget. No such taxes were levied in the previous fiscal's budget.
The association mentioned the prices of sugar declined in the global market in March last.
According to the Trading Corporation of Bangladesh (TCB), sugar was selling at Tk 57/65 per kg in the retail market on July 08 last. It was Tk 60/65 on June 08 last.
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