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Dhaka Tribune

Bangladesh Railway wants tariff cuts on equipment import

Update : 11 Feb 2014, 07:10 PM

The Bangladesh Railways (BR) has requested the National Board of Revenue (NBR) for reducing the existing tariffs on the import of railways products including locomotive, slipper, coach, rail line etc.

Claiming BR as a service-oriented public organisation, the authority argued that the purchases of BR, especially in the donor-funded projects, are being severely hampered due to the high-tariffs and the lengthy payment process, said a high official of NBR yesterday. 

The NBR has been requested to reduce the customs duty at 2.5% from 10% while value added tax at 10% from the existing 15% for smoothing the purchase process.

In a recent letter to NBR, the railway authority claimed that the purchase process of railway products had been facing a setback as Total Tax Incidence (TTI) for such imports varied from 30% to 40%.

Because of higher tariffs rates in the import of railway materials, overall expenditures of many projects virtually go beyond the budget, reads the letter.

According to the BR letter, “To implement the donor-funded projects, we face shortage of funds in local currencies to purchase necessary materials. The problem results in delay of releasing products from the ports for which, banks often imposed more interests, which is also hindering the smooth functioning of BR.’’

The BR, in its letter, has also urged the NBR to submit a counter-proposal to the railways ministry as to how much custom duties and VAT can be reduced in a rational way as per tariff schedule.

Earlier on January 30, 2014 a meeting was held at railway ministry on the same issue. After the meeting, the railway ministry on February 2 sent a similar letter to the NBR asking for preparing a fresh proposal on how much revenue authority can reduce its customs duty and VAT on railway products import. 

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