NBR offers VAT exemption to agri products, medical services

National Board of Revenue (NBR) will offer value-added tax (VAT) exemption to agricultural products, medical services and life-saving drugs under the new VAT Act-2012. The government decided to keep them out of VAT so that  the people can get some relief, the officials concerned said. The VAT law will not apply to small traders, they said, adding that they proposed lowering the proportion of VAT’s annual transaction limits and turnover tax. They also said a large number of traders would be exempt from paying VAT if their proposal were accepted. As a result, the costs of products and services, made available by the traders will decrease, and consumers will be able to buy them at affordable prices. VAT will be waived for imported products such as rice, sugar, edible oil and other basic foods. Also, it will not apply to vaccine and public health services provided by government agencies and charitable organisations. Coronary stents, local software industry, implantable kidneys and immovable properties will be out of the VAT’s purview. According to sources involved in the budget making process, as VAT is likely to be waived for edible oil at all stages from supply to sales, consumers will be able to afford it at lower prices. VAT experts say as the new law applies to only certain sectors, the public might face even more difficulties. Terming their speculation incorrect, an NBR official said VAT exemption was offered to both public and private sectors as before, and the masses would face no problems. The NBR will receive around Tk248,000 crore as revenue in the next fiscal year, and of the  revenue, Tk91,000 crore is likely to come from VAT. Currently, the VAT accumulation is around 36%, and the NBR’s share of VAT 37%. The government is mulling over increasing the share to 40% from 37%, the official also said.