NBR move makes refrigerators costlier

Refrigerator market in the country could be volatile ahead of the Eid-ul-Azha after the tax administration raised assessment value sharply, which could increase refrigerator prices between Tk 6,000 and Tk 12,000 per unit.
On August 29, the National Board of Revenue (NBR) hiked taxable assessment value of imported refrigerators to $1-1.5 per litre from $0.60 following allegations that there have been under-invoicing in case of imports for a long time.
The assessment value would increase the price of a refrigerator by 66.67 percent, said importers.
Bangladesh Electronics Merchants Association said already refrigerator sales face difficult times following depreciation of the local currency, debacle in stockmarket and economic crisis. So the sudden rise in tariff value has baffled the importers.
If the current situation continues, there could be a crisis of refrigerators in the market in the run-up to Eid-ul-Azha, which is now only less than a month away, said the association.
The importers said the NBR has decreed four orders since December last year, making the sector unstable.
They opened letters of credit to bring refrigerators ahead of Eid-ul-Azha under the present tariff structure after the current budget imposed no new changes.
Sales during Eid-ul-Azha, the second biggest religious festival of the Muslims, account for one-third of about eight lakh units sold in the country every year. Imports at 107 percent duty make up about 90 percent of the total domestic demand.
The association said the NBR did not take into account international transaction value, brand, quality, standard and export zone of the product and bulk sales price. Rather they took into consideration retail prices at the sales centres in China and Thailand, which is not logical, as local importers buy refrigerators from manufacturers.
A team of the NBR also recently visited China and Thailand to work out real prices of the refrigerators. The tax administration fixed the latest import duty on the basis of the retail prices at the sales centres in the two countries.
The importers said, depending on different models refrigerator prices would go up by Tk 6,000 to Tk 12,000 due to the rise in taxable assessment prices. As a result, there will be a negative impact on the market.
Some of the consignments have already reached the country's port, while others are in the pipeline. But the importers are not unloading their consignment from the Chittagong Port in fear of losses triggered by the sudden rise in import duty.
An importer said about 700 containers loaded with refrigerators are now stuck in the port. “We are not unloading the goods because we will not be able to make any profit under the amended tariff value,” he said yesterday.
The importers have to pay $72 a day for a container as fines.
The association has already written to the NBR to take urgent steps for addressing the current impasse.