Ceramic makers seek duty relief, hike in import value

Ceramic manufacturers on Thursday reiterated their demand for withdrawing supplementary duties on their products such as tiles, sanitaryware and tableware at the production stage.

They also proposed not reducing the minimum import value for ceramic tiles, rather demanded an increase of the value.

The National Board of Revenue determines customs duties and taxes for ceramic tiles based on the minimum import value that was reduced to $10 per square metre in the proposed budget for FY22.

The Bangladesh Ceramic Manufacturers and Exporters Association (BCMEA) at a press conference at the National Press Club said manufacturers of ceramic items are facing an unequal competition as they are paying supplementary duties ranging between 10% and 15% alongside a 15% VAT, while the minimum import value for tiles per square metre has been reduced by Tk24 in the budget for and the proposed budget for FY22.

BCMEA Md Shirajul Islam Mollah said, "Even after levying a 15% VAT on locally manufactured ceramic products, imposing supplementary duties at production stage is completely unreasonable. Because we pay Tk2,500 crore in taxes every year, whereas the government does not even get Tk100 crore in taxes a year from foreign ceramic products."

The government should either withdraw the supplementary duties on domestic ceramic products, or it should increase the minimum value for imported ceramic products instead of reducing it. Otherwise, the domestic ceramic industry will not be able to survive, the sector will soon collapse, BCMEA General Secretary Irfan Uddin said.

The BCMEA said the ceramic sector is now one of Bangladesh's biggest industries, and the business traces its inception back to the 1960s. 

Apart from 66 brands, more than 100 manufacturing companies, both small and medium, have evolved in the country. At present the sector employs around 5 lakh people, including 55,000 direct employees and those from the backward linkage industry.

Annually, the companies manufacture 25 crore pieces of tableware, 15 crore square feet of tiles and 50 lakh pieces of sanitary ware. A major part of the tableware goes to Europe and to the Middle East.

Shirajul said 90% of the local demand for ceramic products used to be met by imports in the 1980s, but local companies now supply nearly 85% of the total demand.

According to the market research of USADA at the end of 2019, the market size of the ceramic industry was Tk6,550 crore, to which the tiles industry contributed the most with around Tk5,000 crore. The size of the tableware and the sanitaryware industries were Tk500 crore and Tk1000 crore respectively.