Develop standards for energy drinks
The National Board of Revenue yesterday requested the Bangladesh Standards and Testing Institution (BSTI) to develop standards for energy drinks and malt beverages to boost VAT collection.
In the absence of any separate standard for the beverage, one of the popular drinks among youth, the revenue authority faces legal complications when collecting VAT and supplementary duty from it. Soft drinks, including energy drinks and malt beverages, are becoming popular.
“This is one of the top 10 revenue sources,” NBR's VAT wing said in a letter issued to the director general of BSTI.
Currently, 35 percent SD is applied on energy drink and 25 percent on soft drinks, according to the NBR. The NBR said energy drink, soft drink and malt beverage are sold at different prices. Even in advertisements, soft drinks and energy drinks are presented separately to consumers.
The absence of any standard for the beverages not only raises concerns that consumers would be deceived but also creates risks and legal complicacy in revenue collection.
So, it is urgent to develop standards for the soft drinks, energy drinks and malt beverages, taking into account the health risks and collection of actual amount of revenue.
“This sector has high potential for revenue,” said an official of the NBR, adding that annual market size of the beverage would be about Tk 3,000 crore.
The NBR logged in Tk 879 crore as VAT and SD in fiscal 2017-18, up from Tk 798 crore the previous year.
The collection was Tk 780 crore in fiscal 2015-16.
Currently, nearly half a dozen of companies make energy and malt beverage, with Meghna Group of Industry being the latest entrant.
The NBR official said representatives of the International Beverage Association visited the NBR and expressed their desire to invest in making diversified drinks such as energy and sports drinks in Bangladesh.
But they remain shy in investing in the absence of any standard for the beverages, he said.
Khairul Anam, sales and marketing director of Globe Soft Drinks, said his company urged authorities for developing standards for exports several years ago.
He said his company would re-launch some of the products if standards are developed for energy drinks.
“Now, we market our products as carbonated beverage,” said Anam of Globe, one of the leading sellers in energy drink segment.
