Extra tariff puts CI sheet material importers in trouble

The industry of corrugated iron sheets, locally known as 'dheu tin', is going through a tough time not only because of decreased sales during the coronavirus pandemic, but also because of the extra tariff being charged on the imported raw material.

Though the sale of dheu tins has dropped by 80 percent in corona time, importers of the raw material now have to pay 17 percent extra tariff. 

According to Chattogram Customs House, the tariff on imported HR coil (raw material of the corrugated iron sheet) is 37 percent per tonne. But if importers take the facility of Statutory Regulatory Order (SRO), they have to pay 28 percent tariff per tonne of the raw material. Usually, they take the SRO facility.

The price of the raw material was between $430 to $530 per tonne in the international market before the coronavirus pandemic. Chattogram customs fixed 28 percent tariff on the price per tonne of the raw material. After the outbreak of coronavirus, the prices of HR coils have decreased to $395-$407 in the global market. But the customs house continues to charge the 28 percent tariff based on the previous prices instead of the actual current market prices. The customs house has not adjusted the previous prices with the current prices. So importers have to pay 17 percent additional tariff per tonne of raw material.

According to the customs house, the custom value (price of the raw material fixed by the customs house as per the previous market price) for each tonne of 1.6 millimetres HR coil is $530 whereas the actual current market price of the raw material is $407. So, the importers have to give additional $34-$45 on $123 for per tonne of the material now.

Similarly, the custom value of 1.8 mm HR coil per tonne is $500 whereas the current market price is $401. Here the importers have to pay $27-$37 as tariff on the additional $99 per tonne.

Importers have to pay an additional $10-$13 per tonne of 2 mm HR coil as the current price of the coil is $395 and the custom value is $430.

Tarik Ahmed, executive director of Eagle Marka Dheu Tin manufacturer TK Group, said, "The prices of HR coil have decreased by around $100 in international markets during the corona time. But the custom house is charging the tariff based on the previous prices. Though, as per the customs law, tariff should be fixed on the basis of the lowest prices of the imported raw material, the direction of the law is not being followed. If it continues, dheu tin manufacturers will face huge losses. The prices of dheu tins will increase due to the lack of sufficient supply." 

Mohammed Iqbal Hossain, managing director of Arabian Horse brand's dheu tin manufacturer PHP Family, told The Business Standard, "Our business of dheu tin has reduced by 80 percent due to coronavirus pandemic. It is a severe blow against this industry to take extra tariffs on imported raw material during this hard time. Now the tariff should be fixed on the basis of the actual current prices to save the industry." 

Meanwhile, manufacturers of dheu tin have sent a letter to Chattogram Custom House Commissioner to fix the tariff on imported HR coil on the basis of actual prices.

The letter reads, "The prices of different products, including steel-made goods, have decreased in international markets over several months as the prices of petroleum have reduced due to coronavirus pandemic. But Chattogram Custom House is charging the tariffs on steel-made products based on the previous high prices, which is not a prudent decision. According to Bangladesh Customs regulations 2000 (SRO No 57), if there are several exchange prices of different imported products, the custom values of the items should be fixed based on the lowest prices. In this case, what Chattogram Customs House is doing by charging high tariffs is completely against the existing customs laws of the country."

Mohammad Fakhrul Alam, commissioner of Chatogram Custom House, said, "Though the prices of the products have decreased in international markets, the custom house has been charging tariffs as per the custom values on the database. We have to think of collecting revenue alongside decreasing tariffs."

"However, the appeal of the importers to decrease the tariff is under consideration," he added.

Bangladesh imported 3,57,178 tonnes of the raw material worth Tk1,488 crore from January to June this year. Customs has realised Tk288 crore on the imported item. The importers have given Tk49 crore tariff as an additional amount as the custom values of the products have not been adjusted with current prices.