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Businesses are expected to face an increase in export and import costs as 15 percent value added tax (VAT) will be charged on all port service fees in line with a recent directive of the revenue authority. The National Board of Revenue (NBR) said the indirect tax should be collected on all services — from security checks of goods to settlement of shipments. Presently, the indirect tax is imposed on 25 of those services. The NBR directive came after the Chittagong Port Authority (CPA) sought clarification on the applicability of VAT on charges and fees collected on various services provided to businesses.
As per a new NBR rule, Factories located at the economic zones will need to obtain local sales permit (LSP) from the Bangladesh Economic Zone Authority to sell finished goods in the local market for consumption. In addition, they will be required to obtain local procurement permit (LPP) to enjoy tax and duty benefit on purchase of raw materials and semi-finished goods from domestic market under the bonded-warehouse facility. the factories will have to obtain the permit from the Bangladesh Economic Zones Authority (BEZA) to produce before the customs authority.
Exports of jute and jute goods to India slumped by 47.62 per cent in the first half of the current fiscal year (2017-18) compared with that in the same period of last fiscal year (2016-2017). Export earnings from jute and jute goods slipped to $55.81 million in July-December of FY18 from $106.54 million in the same period of FY17. The decline can be attributed to the shock of anti-dumping duty imposed by India on Bangladeshi jute products in January last year.