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The government has withdrawn all sorts of duty exemptions for the import of goods used in hotel construction and decoration in the proposed budget for FY24.
This came into effect on Thursday.
In the budget placed in parliament on Thursday, Finance Minister AHM Mustafa Kamal said to support the hotel industry’s expansion, a notification for importing materials at concessionary rates has been in place for a decade.
“As many large-scale and high-quality hotels have already been built under this facility, it seems unnecessary to continue the duty tax exemption, and therefore, for the sake of revenue protection, I propose withdrawing the existing notification.”
The National Board of Revenue (NBR) provides massive duty exemptions for importing at least 50 items, including interior decoration as well as cooking, firefighting and building security equipment; furniture; and lighting and health club equipment.
Stakeholders think the move is expected to hit the country’s tourism and hospitality sector hard, adding there are not adequate hotels with top-notch facilities for local and international guests.
The NBR in 2014 introduced a nearly 100 per cent duty exemption for the import of materials required for constructing standard residential hotels to expand the hotel and tourism sector and encourage the construction of hotels of good standards for providing the best services for local and foreign guests.
In a statutory regulatory order (SRO) issued at the time, the NBR said only a 5 per cent duty will be applicable to the import of essential and capital machinery-related equipment for hotels while all other duties will be exempted.
The order further said the duty on 42 HS code products under seven categories of hotel construction materials was exempted.
Prior to that, there was an average of 110 per cent duty on such material imports, NBR sources said.
In FY22, the NBR set a 10 per cent duty on the import of such materials and exempted other duties, including regulatory duty, VAT, and supplementary duty.
