Home ›› 04 Oct 2022 ›› News
National Board of Revenue (NBR) is going to extend the period of Value Added Tax (VAT) exemption on edible oil imports till 31 December.
As a result, consumers may enjoy buying soybean and palm oil at current or cheaper price due to the extension of VAT exemption period, sources said.
The decision came after a letter from the Commerce Ministry issued to NBR about VAT cut on edible oil till June 30 next taking into consideration high exchanging rate of dollar.
Due to higher price of exchange rate of Tk105 a dollar, up from Tk86 per dollar, the price of the commodity price cannot be reduced in the local market despite the price of soybean and palm oil declined in the global market, the letter reads.
However, the revenue board extended the exemption period for three months as it needs to further review the global volatile market situation and exchange rate of dollar. This is why the board decided to extend the exemption period for three months now.
The gazette may be published within a couple of days, confirmed NBR sources.
Vat exemption was lifted on 01 October last as the new notification was not issued after September 30.
Earlier, NBR on 16 March this year cut the VAT on edible oil imports down to 5 percent from 15 percent and on 14 March slashed VAT by 15 percent on soybean and palm oil production and 5 percent at business level till June 30 to lessen pressures on consumers amid high inflation and skyrocketing prices of every essential commodity.
Later the board on 03 July extended the exemption until September 30.
At present people buy bottled soybean oil for Tk192 a litre and loose soybean oil at Tk175 a litre, according to the Trading Corporation of Bangladesh.
According to the Commerce Ministry, Bangladesh has a demand for around 20 lakh tonnes of edible oil per year while around 10 percent of it can be sourced from local production and the rest comes from imports.
Bangladesh’s overall cost of importing soybean and palm oil has gone up by around Tk11, 043 crore within just a year. The country spent Tk24, 508 crore on edible oil import in the just concluded FY.
It was an increase of nearly 82 percent compared to Tk13, 464 crore posted in the FY21.
Moreover, the local industry spent 73 percent more on per tonne of edible oil when compared year-on-year.
In the FY22, the average import cost of a tonne of edible oil was about Tk1.30 lakh, which was Tk75, 000 in the FY21, according to the National Board of Revenue (NBR) data.
In the just concluded FY, the import of refined and unrefined soybean and palm oil also increased by more than 5 percent to 18,86,936 tonnes despite a multitude of issues, such as the USD shortage, rising commodity prices, high freight charges and the Russia-Ukraine war.
Bangladesh imported 17, 96,004 tonnes of such items in the FY21.
