VAT on cooking oil imports cut to 5%
The reduced VAT amount will be applicable till 30 June this year
The National Board of Revenue (NBR) on Wednesday cut the much-talked-about value-added tax (VAT) on edible oil at import level to 5% from 15%, but the question is how much relief the end consumers would enjoy for the waiver.
Earlier, the government withdrew the VAT at other levels – production and supply – which suppliers termed a "futile attempt" to substantially reduce edible oil prices in the market as value-addition of the essential item at those levels and subsequent VAT was very little.
Showing data-based evidence, officials of two leading edible oil supplying companies in the country then categorically said a cut in VAT at the import level would substantially reduce the prices.
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Echoing them, all the suppliers urged the government to decrease the import-level VAT, and the NBR within a short time did so. Now, there is no VAT on edible oil at production and supply levels except 5% on import.
The Business Standard tried to talk to the officials of the leading suppliers to learn about the reflection of their projections in the market after their demand was fulfilled, but this time they did not even receive phone calls despite several attempts till filing the report.
One of the officials earlier said, as of the then booking prices, the total VAT on edible oil was approximately Tk28 per litre. However, the new waiver reduced the VAT to about Tk6 a litre, according to the NBR, which means consumers are supposed to have a relief of Tk22.
Besides, a change in global edible oil markets would change the VAT amount and edible oil prices further.
Meanwhile, consumers called for ensuring their benefits of the VAT waiver and urged the commerce ministry to take a strict stance against any kind of irregularity in the edible oil market.
"We see when a cause of price hike comes, businesspeople raise the price without any delay, but they do not do so in case of reducing the price," a Fazlee Shamim Ehsan told The Business Standard.
"We want rationality and justice in commodities markets," he added.
