Re-rollers, steel millers urge govt to not impose 15 pc VAT

Dhaka,  Mon,  26 June 2017
Published : 14 Jun 2017, 22:06:07
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Re-rollers, steel millers urge govt to not impose 15 pc VAT

FE Report


Owners of auto re-rolling and steel mills Wednesday urged the government not to impose 15 per cent VAT on MS rod from July next.

They pleaded for VAT exemption on the product until June 30, 2019.

They regretted that locally manufactured luxurious products like refrigerator, freezer and AC will enjoy value added tax (VAT) exemption until June 30, 2019.

If these luxurious products get VAT exemption, then there is no logic for MS rod and its products to be out of VAT exemption facility until 2019, they said.

Their demand came at a joint press briefing of Bangladesh Auto-re Rolling and Steel Mills Association (BARSMA), Bangladesh Steel Mills Owners Association (BSMOA) and Bangladesh Re-rolling Mills Association (BRMA) at the conference room of the Dhaka Chamber of Commerce and Industry (DCCI).  

The businessmen said in the proposed budget for the fiscal year (FY) 2017-18, 15 per cent VAT has been proposed on raw materials of MS products and 15 per cent on finished MS products.

Besides, 15 per cent VAT on power bill, instead of the present five per cent, will compel the customers to pay an additional Tk 7,800 for purchasing one tonne of MS rod.

Rod is now being sold at Tk 50,000 per tonne with only Tk 900 VAT.  

If the proposed new VAT structure comes into effect from July, then the prices of MS rod and other products will go up and increase the cost of building infrastructure.

Besides, the consumers will lose their ability for purchasing MS products. As a result, the local industries will be forced to reduce their production with huge financial losses.

Many people in the sector will thus become unemployed.

The housing sector in the county is now facing a serious meltdown. It will be intensified if the government imposes 15 per cent VAT on MS rod and other products from next July, they said.

Monwar Hossain, chairman of Bangladesh Auto Re-rolling and Steel Mills Association, said the country's steel and re-rolling industries are now producing high-quality rod, angle and channel and MS products.  

The sector employs 0.2 million people directly and one million indirectly with an investment of around Tk 500 billon, he said.

He said MS rod and other products are vital components for building infrastructure.

Considering their significant importance, the MS products have been enjoying VAT exemption over the past few years that helped expansion of its even in rural areas.

The annual use of steel and MS products has reached five million tonnes from two million tonnes in 2009.

"If our demand is not met before July, we will again sit with the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) for conveying our message to the government for reconsidering our demand," he said.

     talhabinhabib@yahoo.com
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