Prices of elevators, an imported equipment, may go up by 25% if the government implemented its new import duty structure, proposed during the national budget for fiscal year 2022-23 last week.
The Bangladesh Elevators, Escalators and Lift Importers Association (BEELIA) on Tuesday placed their demands for keeping the “capital machinery (CM)” status of the lifting machines as the proposed budget scrapped the CM status of elevators and imposed a 31% duty on this import-dependent equipment.
Previously, importers had to pay 11% duty, 1% customs duty (CD), 5% advance income tax (AIT) and 5% advance tax (AT).
After scrapping the CM status, the government fixed 5% CD, 15% VAT, 5% AIT and 5% AT, says BEELIA president Emdad Ur Rahman while placing a seven-point proposal at a press conference.
He also said that more than 90% of new apartments and buildings were small in size (six to eight storeys) in Dhaka and elsewhere in the country.
Such buildings have a demand for lifts that now cost Tk18-40 lakh depending on quality and features, he adds.
For using lifts, he said, users pay a service charge in every building both in commercial units and residential buildings.
Presenting a keynote, BEELIA secretary Shafiul Alam Uzzal said that lift sales will drop.
On the other hand, consumers will pay an extra charge for using lifts.
Bangladesh is mostly import-reliant on lifts, he adds.
Only a few companies have started assembling lifts locally after importing all equipment, hardly meeting 5% of the demand.
Mushfiq Huq, director of Creative Engineers Ltd, said: "Lifts are capital machinery. I do not understand why they are being removed from that status. Regardless of the status change, their function will still remain as capital machinery for the housing industry.
“The housing sector is heavily reliant on imports and this will further push up the cost of construction and ultimately increase the price of apartments and office buildings.”
Apart from import, a lift management company has to raise expertise which is most important to ensure safety of the people, he also said.
A lift has many features in which local companies are yet to achieve required proficiency, Huq added..
An elevator with a capacity to lift 8-10 persons costs Tk18-40 lakh which may rise to Tk23-50 lakh, he feared.
BEELIA vice-president Aktar Zamil Bhuiyan says the sector has grown at 10-15% for the last one decade.
It will be tough to maintain this growth in the coming days if such high duties are imposed, he cited.
The association's proposals included making a policy on local lift manufacturing, the setting of a “lift standard” following the international standard.
It also suggested that a regulatory entity be formed considering safety of life alongside achieving capacity, it proposes.
According to the BEELIA and the National Board of Revenue, importers bring 4,000-5,000 units of lifts and elevators annually, amounting to Tk800-900 crore.
