The value-added tax wing of the NBR issued a statutory regulatory order on Tuesday offering relief from advance tax on import of all chemical fertilisers
The National Board of Revenue (NBR) has withdrawn advance tax of five percent on the import of all chemical fertilisers to avoid any negative impact on agriculture and to keep the product price stable in the local market.
The value-added tax wing of the NBR issued a statutory regulatory order (SRO) on Tuesday offering relief from advance tax on import of all chemical fertilisers, including triple superphosphate (TSP), diammonium phosphate (DAP), muriate of potash (MOP) and powdered MAP.
Earlier, the government, in the budget for FY2019-2020, imposed five percent advance tax – previously known as advance trade VAT – on most imported items including fertilisers.
Private sector importers of non-urea fertilisers reacted strongly and started demanding the withdrawal of the tax.
The Bangladesh Fertiliser Association (BFA), a platform of fertiliser importers and dealers, held several meetings with the finance minister, the agriculture minister and the NBR chairman over this issue.
Importers opposed the decision to impose advance tax on fertiliser import because the government provides subsidies on agricultural products to facilitate production in this sector and to keep the price of fertilisers affordable for farmers.
They say that fertiliser import should get a duty-free facility.
Importers have complained that several ships carrying imported fertiliser are stuck at Chittagong port because of the complications arising from the imposition of advance tax.
In a letter to the NBR Chairman Md Mosharraf Hossain Bhuiyan, on July 23, the BFA even threatened to stop fertiliser import if the tax was not withdrawn.
The total annual demand for fertilisers is more than 50 lakh tonnes, of which the demand for completely import-dependent urea fertiliser is more than 24 lakh tonnes.
Bangladesh's urea production capacity is around 8 lakh tonnes. The Bangladesh Chemical Industries Corporation imports the remaining 18 lakh tonnes to meet the domestic demand.