VAT exempted on machinery for ship-recycling yards

FE Team | Published: December 13, 2024 00:02:28

The government has exempted VAT, and advance tax on import of capital machinery for ship-recycling yards to promote environmentally sustainable practices in line with global standards, reports UNB.
The order comes into immediate effect and will remain valid until 26 June 2025, says an office order signed by Mashiur Rahman, First Secretary (VAT Policy) of the National Board of Revenue (NBR).
According to the order, the government is committed to converting all ship recycling yards into Green Ship Recycling Yards by June 26, 2025.
Failure to achieve this transformation within the stipulated time will result in a ban on importing ships for recycling in Bangladesh beyond the deadline.
Consequently, the VAT exemption has been granted under subsection (3) of section 126 of the VAT and Supplementary Duty Act, 2012 (Act No. 47 of 2012).
The imported capital machinery must solely be utilised for the development of shipbreaking and recycling yards.
At the time of customs clearance, importers are required to submit a certification from an officer not below the rank of Deputy Secretary of the Ministry of Industries, affirming that the machinery will be used exclusively for this purpose.
NBR has specified that the machinery imported at a concessional rate cannot be sold or transferred within five years of importation. If any machinery is sold or transferred before this period, the VAT exemption will be revoked, and all applicable taxes, including advance tax, will become payable.
Besides, both the VAT division officers and relevant revenue officers will oversee compliance, ensuring the machinery is used exclusively in shipbreaking and recycling yards and is not sold or transferred within the stipulated five-year period.
Importers must also submit an undertaking on a non-judicial stamp worth Tk 300, pledging not to sell or transfer the machinery within the specified timeframe. This undertaking must be submitted to customs authorities at the time of clearance.