Refix duty on used lube oil, urge ship breakers

Bangladesh Ship Breakers and Recyclers Association (BSBRA) on Sunday called upon the government to refix duty on used lubricant oil, in response to the Chattogram customs authority’s recent move to withdraw 40 per cent depreciation facility on this item.

Addressing a pre-budget meeting at the National Board of Revenue (NBR) office in Dhaka on Sunday, ship breakers said the duty imposed on new and used lube oil is now the same, which is unfortunate.

Presenting BSBRA’s proposal to the NBR, the association’s Senior Vice President Kamal Uddin Ahmed said, “Ships use multiple types of oil, including furnace, lube and diesel. The Chattogram customs authority had introduced a 40 per cent depreciation facility for used lube oil in 2008.

“However, this year, the authority withdrew this facility without any discussion. So, we are now paying the same amount of duty for new and used lube oil found inside ships – which is Tk 85,000 for per tonne.”

He added, “This move is causing financial losses to scrap ship importers and yard owners. We urge the NBR to refix the duty imposed on used lube oil to its previous amount, set by the general circular-55 in 2008.

At the event, Managing Director of PHP Ship Breaking and Recycling Industries Ltd and also Vice President of BSBRA Mohammed Zahirul Islam said, “I am urging the government to cancel the requirement of Bangladesh Standards and Testing Institution (BSTI) certification for outfitting goods – such as used table fans and electric kettles – that comes with ships.

“Outfitting goods come with ships, so those do not have import documents. This requirement causes delays and complications in the customs process, which in turn delays our work.”

In response to a question from NBR Member (Customs Policy) Md Masud Sadiq, Zahirul said, “A total of 10 green yards are ready. No one will be able to operate without green yards. We hope that no yard workers will die in accidents in future if all such establishments go green.”

At the meeting, the ship breakers also urged the government to reduce import duty for scrap vessels from Tk 1,500 to Tk 500 per tonne. They also requested that VAT for importing such vessels be dropped from Tk 1,000 to Tk 500 per tonne.

Bangladesh Ocean Going Ships Owners’ Association (BOGSOA), Bangladesh Shipping Agents’ Association (BSAA), Bangladesh Freight Forwarders Association (BFFA), Federation of Bangladesh Customs Clearing and Forwarding Agents Association (FBCCFAA) and Bangladesh Inland Container Depots Association (BICDA), and Shippers’ Council of Bangladesh also submitted their presented separate proposals at the pre-budget meeting.