VAT on oil import now 5pc
The government has reduced the amount of Value Added Tax (VAT) from 15 per cent to 5 per cent in importing soybean and palm oils.
The internal resources division (IRD) issued a gazette notification in this regard on Wednesday evening.
The notification reads the exemption will remain effective until 30 June.
Earlier on Tuesday, the finance ministry came up with this disclosure in a press briefing in Dhaka. They told the newsmen that the government decided to decrease the amount of VAT on the import of soybean and palm oils in a bid to rein in the price hike of the oil in the market.
Businessmen's reaction
Businessmen said if the portion of VAT is brought down to 5 per cent, the price of edible oil will decrease around Tk 12 per kg. However, it completely depends on the amount of expenditure for the import.
The businessmen had to spend between Tk 118 and Tk 122 per kg to import unrefined soybean oil via Chattogram port. They claimed the cost will go up to around Tk 127 for the upcoming consignment.
As the government has decreased the VAT on oil import, the expenditure will drop to around Tk 12. However, after the clearance from the port, the oil now is going to the market paying 15 per cent of VAT. So, it will not be possible to sell oil in reduced price.
Therefore, questions arise as to how far the reduction of VAT will impact the oil market.
The month of Ramadan will come to bring fresh consignment of oil by paying 5 per cent of VAT. The Ramadan will begin in the first week of April.