The National Board of Revenue (NBR) has slashed the value-added tax (VAT) on steel products by as much as 75 percent in a bid to contain the prices of the key construction material.
In a notification on October 13, the revenue administration said it fixed specific VAT on mild steel (MS) products at Tk 500 per tonne, down from Tk 1,200 fixed at the beginning of the fiscal year.
In the same vein, it fixed Tk 500 VAT on MS products made from billet/ingot and meltable scrap, down from Tk 2,000 each tonne previously.
The NBR also imposed Tk 1,000-1,200 as specific VAT on raw materials of steel: ferro-manganese, ferro-silico-manganese alloy and ferro-silicon alloy.
The products previously had 5 percent VAT.
The drastic cut in VAT comes three and a half months after the government levied the indirect tax paid by consumers.
The reduction in specific amount of VAT is meant to contain the price spike of construction material, said an official of the NBR.
Steel millers earlier said the VAT hike would fuel prices of steel, which would in turn increase cost for both public and private construction.
Apart from rod, the NBR also reduced VAT on cement sheet to 5 percent and on credit rating agency to 7.5 percent from 15 percent at the beginning of the fiscal year.
In another notification, the NBR also cut the supplementary duty on bidi.