Tax cut for industrial raw materials

The National Board of Revenue (NBR) has reduced taxes on some industrial raw materials in a new tariff structure to help local manufacturing industries and real estate to grow faster.

The VAT Department of the NBR issued a statutory regulatory order (SRO) in this regard yesterday.

In the new tax structure, tariff on production of corrugated iron (CI) sheet from hot rolled (HR) coil has been reduced from Tk 25,500 to Tk 18,500.

Cold rolled (CR) coil, galvanised plain sheet and CI sheet are the sub-products of HR coil, a basic raw material for making tin, window, door, steel cupboard, ceiling fan and tube light box.

Earlier manufacturers had to pay tariff of Tk 10,000 for producing CR coil from HR coil, and Tk 15,500 for making CI sheet from CR coil, totalling Tk 25,500.

The NBR has reduced tariff in every stage of production of CR coil or CI sheet from HR coil.

The tax administration has fixed different tariffs to create a level-playing field for those companies who have to pay more tax for not having the facilities to produce CI sheet directly from HR coil.

"We have reduced tariff, as local manufacturers have been demanding it for long. We hope this reduction will help importers and manufacturers cut their production cost," said a high official of the VAT (value added tax) Department.

"Now the government will be able to collect more revenue than before," he said.

He said the manufacturers would be able make high quality products, including CI sheet (tin), window, door, steel closet or cupboard, ceiling fan and tube light box that have a huge demand in the local market.

Kazi Salahuddin Ahmed, deputy general manager of Galco Steel (BD) Ltd, said they were facing uneven competition with imported finished products.

"Earlier the production of CR coil and CI sheet from HR coil was under the same tariff and VAT registration, which led to uneven practices over the cost of production," he said, adding: "It often compelled us to pay excess VAT."

"Now we will be able to compete with the imported finished products and make things at lower costs that will increase production."

Mohammad Nasir Ullah, vice president of Bangladesh Iron and Steel Importers' Association, said the government decision would help the importers of HR coil, ultimately benefitting the steel product manufacturing and the real estate sectors.

Abdur Razzaque, president of Bangladesh Engineering Industry Owners' Association, said the prices of raw materials will witness a decline, helping the sector grow faster.

sayeda@thedailystar.net