VAT exemption certificate requirement for port services revoked

The National Board of Revenue has finally withdrawn the mandatory provision of obtaining VAT-exemption certificate, on a case-to-case basis, for the 100 per cent exporters to enjoy speedy cargo delivery from the customs ports.

Meanwhile, exporters have welcomed the move, saying it will make it easier for the export-oriented industries to do business.

As per a recent decision of the NBR, the export-oriented industries will not be required to have the VAT exemption certificates for receiving services from the ports, freight-forwarders, clearing and forwarding agents, inland container depots, and shipping lines.

To this effect, the policy wing on VAT issued an order on November 11, relaxing the provision following proposals of the exporters and operators of the private inland container depots or ICDs.

The order, signed by first secretary (VAT policy) Kazi Farid Uddin, has been given retrospective effect since September 26, 2019.

The issue came into the limelight after Chattogram VAT authority demanded around Tk 330 million from the off-docks or private ICD operators against their release of cargos without VAT-exemption certificate. As per VAT law, exporters are exempted from payment of VAT on their port services.

However, the new VAT and Supplementary Duty Act 2012, passed in June 2019, imposed a provision making VAT-exemption certificate mandatory for each of the export-oriented companies.

According to VAT officials, exporters had to obtain the mandatory certificate from customs, excise and VAT commissionerate and produce to the port customs or private ICD to avail the VAT exemption facilities.

But from now on, the port authorities, freight forwarders, insurance companies, shipping agents would be empowered to allow VAT exemption on the basis of relevant documents as an evidence of 100 per cent export-oriented companies, they added.

The VAT-registration certificate or documents provided by Bangladesh Investment Development Authority, Bangladesh Export Processing Zones Authority and similar entities, certificate of exporters’ association would be sufficient to prove a company as a cent-per cent export-oriented one.