Sugar refiners relieved of progress tax
The National Board of Earnings (NBR) has relieved sugar refiners of advance tax (AT) on import of raw sweeteners for processing -- a move that may reduce pressure on their working capital.
The maneuver comes one . 5 years after the earnings authority introduced the AT in July 2019 beneath the VAT law 2012 to be able to ensure that firms maintain records of transactions.
The NBR said the worthiness added tax (VAT) was 5 % and refundable after adjustment of the payable VAT. The truth is, a number of companies are yet to obtain refunds of excess VAT.
Sugar refiners are actually one of those.
A senior official of the NBR said it decided to remove the AT on raw sugar import as the VAT was exempted at the production stage.
"As no VAT is made at manufacturing stage, refunds happen to be generated and refiners need to await refunds. As there is absolutely no VAT at production stage and price of funds of refiners rises because of obligation to fork out the AT, we've withdrawn the AT on raw sugar import," he said.
Biswajit Saha, director for corporate and regulatory affairs of City Group, welcomed the NBR step.
"No refund will end up being generated in near future as we will not have to pay AT during imports," he explained, adding that refund promises of roughly Tk 400 crore from sugar refiners remained pending for clearance at the NBR.
The City runs one of the primary refineries having a processing capacity of 5,000 tonnes a day.
Bangladesh annually requires 18-20 lakh tonnes of sugar and imports meet 95 per cent of the domestic demand as regional production is scanty.
Raw sugar imports soared 36 % year-on-year to 27 lakh tonnes in the January-September amount of 2020, according to data of the Bangladesh Bureau of Statistics.
The NBR issued the notification at the same time when prices of sugar were increasing, thanks to its upward trend in the international market.
Prices of every kilogramme of sugar rose 6 % to Tk 65-Tk 70 yesterday found in metropolis markets from Tk 62-65 a month ago.
