The country’s ceramics manufacturers have urged the National Board of Revenue (NBR) to reduce the customs duties on imported raw materials to make up losses due to 30-40% wastage in the import process.
Leaders of Bangladesh Ceramic Wares Manufacturers Association (BCWMA) said the imported mineral materials contain moisture, iron, water and other unnecessary elements cause huge wastage, which cannot be used for any other purpose, incurring around 40% loss. But we have to pay duties also on the wastage contents.
The leaders of the association came up with the demand at a pre-budget discussion with the NBR officials held on Sunday at its headquarters in Dhaka.
As a result, it would be difficult for them to maintain the global competitiveness, as there is no subsidy for the industry, said Rizvi-Ul-Kabir, general secretary of BCWMA.
He said, in the import of raw materials including Bone Ash, Quartz, China Clay, Fire Clay, Ball Clay, and Feldspar, the manufacturers have to pay 5% customs duties, which needs to be reduced to 2% to cover up the loss.
The country’s ceramic industry, which has employed around 5lakh workers, has so far invested Tk5000 crore and witnessed 200% growth in the last five years. The industry, which was started in 1994 with Madhumati ceramics, has now 8-19 companies that meet 70% of the domestic demands and export in many other countries.
Highlighting the performances of the industry, the association leaders demanded for the withdrawal of 15% supplementary duty on the import of ceramic tiles, which is no more considered as luxurious products.
“Tiles has been reached to the rural level and it is no more considered as luxury one, so the duty needs withdrawal,” said Kabir.
In response, NBR chairman Md. Ghulam Hussain said: The NBR will allow the duty cut if the businesses are ready to pay revenue with 20% growth in the coming fiscal year 2014-15.
“You have to maintain 15% revenue growth in the coming FY. We have been instructed to manage 22% revenue growth in the coming budget comparing to the FY-13-14. You will witness a development in the sector if we withdraw 15% duty. We will withdraw the duty, but give us 20% revenue growth from your sector,” he said.
The association leaders also demanded a proper literature of the Harmonized System (HS) codes to avoid any sort of misleading tax imposition.
“Due to the misleading H.S codes, we need to pay 10% tax on import of Aluminum Liner although we are supposed to pay 2% tax. For importing Zirconium Silicate, we are supposed to pay 5% tax, but now we are paying 10% tax as the taxmen consider the products as ‘others’ category,” he added.
Replying to this demand, NBR chairman said, “We will modify the literatures by amending it with proper definition of the products.”
The other demands include reduction of customs duty from 10% to 5% at auxiliary materials and import tax on machineries from 25% to 2% etc.
The businesses also proposed NBR to increase the supplementary duty on imported tiles, sanitary-ware, and tableware products from existing 60% to 80% and on opal glass tableware and pyrex products from existing 45% to 80% to protect local industry, collect increased revenue, prevent under-voicing etc.
In response, Ghulam Hussain said: We cannot provide over 50%-60% protection for the local industries. Except some products mentioned under 147 H.S. codes, which are harmful for health and environment, the NBR will cut down supplementary duty and regulatory duties on all other products to zero level from July 1, 2015.
NBR member Barrister Jahangir Hossain said: “We are going through a discriminatory rate of protection as the difference between standard rate of protection between the domestic manufacturers and the importers are witnessing a difference of 140%-150%, which is ideally set at 40%-50% difference.”
He also said the NBR has already started working on to come out from this discriminatory system.
The meeting was attended, among others, by the association secretary M Sirajul Islam Molla, representatives from RAK ceramics and Madhumoti ceramics.
