Gold may be exempt from VAT hike

Dhaka,  Wed,  23 August 2017
Published : 14 Jun 2017, 00:31:09

Gold may be exempt from VAT hike

FE Report

The government may backtrack on its move to impose 15 per cent VAT on gold as it deems the sector could be worst affected by the tax hike, officials said.

In the proposed budget for Fiscal Year (FY) 2016-17, the finance minister increased the VAT rate for gold from the current 5.0 per cent under the existing VAT law, framed in 1991.

Under the new VAT and Supplementary Duty Act 2012, the government will impose 15 per cent VAT at a uniform rate for businesses.

Officials said the tax incidence will be reduced as businesses will be able to claim rebate on the VAT that they paid at the time of purchase or import of raw materials. 

A senior official of the National Board of Revenue (NBR) said the gold businesses will not be able to claim rebate as there is no VAT at import stage.

The sector would be hit hard as neighbouring India has lower tax on gold, he added.

"Consumers will prefer to purchase gold from India at a lower price instead of paying 15 per cent VAT in Bangladesh," he added.

Following widespread concern, the NBR held a meeting Tuesday with the leaders Bangladesh Jewellers Samity (BJS).

In the meeting, the NBR assured them of considering their demand to rein in gold prices.

The revenue board also told the BJA leaders not to worry over the customs raids on gold shops, following a recent incident involving a big shot in the trade.

The customs intelligence has seized 15.13 maunds of gold from five showrooms of Apan Jewellers.

"The NBR will conduct raid on the basis of specific information," said a senior official of customs intelligence.

The NBR will take necessary steps if it found someone harassing the gold businesses, he added.    

NBR chairman Md Nojibur Rahman chaired the meeting. BJS leaders Gonga Choron Malakar, Dilip Kumar Agarwala, Enamul Huq Dolon, Kazi Sirajul Islam and Bangladesh Dokan Malik Samity president Helal Uddin attended the meeting.
Editor : A.H.M Moazzem Hossain
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