National Board of Revenue (NBR) has withdrawn advance tax at the rate of 5 percent on import of all types of chemical fertilisers to avoid any adverse impact on agriculture and keep the price of the products stable in the local market.
Value-added tax wing of NBR on Tuesday issued a statutory regulatory order offering exemption from payment of AT on import of all types of chemical fertilisers, including triple super phosphate, diammonium phosphate, muriate of potash and powdered monoammonium phosphate.
The government in the budget for the current fiscal year 2019-2020 imposed 5 percent AT, which was previously known as advance trade VAT, on import of most of the items including fertilisers.
The decision created severe resentment among private sector importers of non-urea fertilisers and they have been demanding withdrawal of the tax.
Bangladesh Fertiliser Association, the platform of fertiliser importers and dealers, held several meetings with finance minister, agriculture minister and NBR chairman on the issue.
Importers argued that there should be no advance tax on import of fertilisers as the government gave subsidy on the products to facilitate agricultural production and keep the prices of fertilisers affordable to farmers.
Fertiliser import was also exempted from payment of any types of duties, they said.
They said that a number of ships loading fertilisers imported by both public and private sector importers remained stuck at Chittagong port due to complexities related to imposition of advance tax.
The fertiliser association on July 23 in a letter to NBR chairman Md Mosharraf Hossain Bhuiyan even threatened to stop import of fertilisers if the tax was not withdrawn.
In this context, NBR withdrew the tax following approval of finance minister AHM Mustafa Kamal.
Annual combined demand of fertilisers was more than 50 lakh tonnes. Of which, annual demand of non-urea fertilisers were more than 24 lakh tonnes which was completely import dependent.
Of urea, the country’s production capacity was around 8 lakh tonnes and Bangladesh Chemical Industries Corporation imports the remaining 18 lakh tonnes to meet the domestic demand.
Of non-urea fertilisers, Bangladesh Agricultural Development Corporation import 60 per cent of annual demand and private sector importers import the remaining 40 per cent.
The country has a tiny amount of TSP and DAP fertilisers production worth 75,000 tonnes and 1 lakh tonnes respectively.
The government allocated the private importers to import a total of 10.75 lakh tonnes of non-urea fertilisers, including DAP 4 lakh tonnes, MOP 3.5 lakh tonnes, TSP 2.75 lakh tonnes and power MAP 50,000 tonnes, according to agriculture ministry.
Fertiliser Association executive secretary Riaz Uddin Ahmed told New Age that a number of ships with fertilisers imported by public and private sectors had remained stuck at the port.
Now, importers would release the products as the government withdrew the tax, he said.