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Commerce Ministry has written to NBR seeking VAT exemption until June
2023 to keep the market stable.
VAT exemption on edible oil may be extended by another three
months. The National Board of Revenue (NBR) is rethinking the VAT exemption
facility at the import level due to the rise in dollar value in the country and the rise in the price of edible oil in the global market.
According to NBR sources, the VAT exemption facility at the
local and import level may be maintained till December 31. Notification in this
regard may be issued in one or two days.
The VAT exemption facility for edible oil expired on
September 30 after a one-time extension. However, the Ministry of Commerce and
edible oil traders have demanded that VAT benefits continue throughout the
current fiscal year 2022-23.
An official of NBR's VAT department said on condition of
anonymity that NBR agrees in principle to maintain VAT exemptions at the import
and local levels. However, the dollar crisis and the international market
situation will be reviewed. In that case, the VAT exemption facility may be
kept for a few months in another phase for the time being.
Last March, the price of edible oil in the local market started to increase. At one stage this price exceeded Tk 200 per liter. Currently, the price of bottled soybeans is Tk 192 per liter. The government fixes the price of edible oil.
On September 20, a letter was sent to NBR Chairman Abu Hena
Md. Rahmatul Munim from the Ministry of Commerce requested to maintain the VAT
exemption facility of edible oil till June 30, 2023. It is said in the letter,
although the prices of crude soybeans, refined and crude palm oil in the
international market have decreased slightly, due to the increase in the price
of the dollar (previously, 1 dollar is equal to 86 taka, now 1 dollar is equal
to 105 taka), it is not possible to reduce the price of the product in the
domestic market at a proportional rate.
Therefore, it is necessary to extend the period of VAT
exemption from October 1 to June 30, 2023, to keep the price and supply of
edible oil stable in the local market.
Sofiul Athhar Taslim, director of TK Group, said, "As much
as the price has fallen in the international market, the price of edible oil
has adjusted and equalized due to the increase in the dollar price. Now if the
VAT exemption facility is withdrawn, then the price may increase by at least 12
percent from the current market rate.
On March 14, the NBR issued a notification waiving 15 percent
VAT at the production level and 5 percent at the trading level of soybean and
palm oil. Two days after this, the 15 percent VAT imposed on the import of
edible oil was reduced to 5 percent at the import level. Then its term was
fixed till June 30. Later on July 3, the period was extended to September 30.
But after that NBR did not issue any notification for an extension.
According to sources from the Ministry of Commerce, currently, there is a demand for 2 million tons of edible oil in the country. Of this, two
lakh tonnes are procured from the local market; The remaining 18 lakh tonnes
are imported.
|Source: Online/SZK
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