VAT cut likely for power plants’ coal import
The National Board of Revenue is likely to cut value added tax on the import of coal for power plants to 5 percent from present 15 percent in order to facilitate electricity generation at reduced costs, said a senior official yesterday.
“We expect to issue a gazette in this regard soon,” said the official, seeking to remain unnamed as he is not authorised to talk to the press.
The move comes at a time when the construction of three coal-fired power plants in the public sector is on while one in Payra in the southern district of Patuakhali is expected to start producing around 660 megawatts of electricity.
Apart from this, four private sector coal-based power plants are in the process of being established, according to the minutes of a meeting between the NBR and the Power Division in August this year. A huge amount of coal would be required once these power plants go into operation.
The NBR said there were no customs and other duties for coal import.
Some 15 percent VAT, 5 percent advance tax, and 5 percent advance income tax are applied on the fuel’s import, according to the NBR.
As coal accounts for nearly 65 percent of the electricity production cost, a reduction in the VAT rate will bring down the cost of generation, said the meeting minutes.
Considering the issue, the NBR has decided to slash the VAT on coal import to help reduce the production cost, the official said.
The NBR earlier provided duty benefit
for the import of furnace oil and liquefied natural gas.