Bangladesh Budget: Specific custom duty on import of Sponge Iron reduced by Tk. 200/MT & Regulatory duty (RD) on Ferro alloys reduced by 5%.
Finance Minister of Bangladesh Abul Maal Abdul Muhith on Thursday – 7 June, announced national budget for 12th time before parliament for fiscal year 2018-19. Overall, this budget is not very special for the iron and steel industries as a reduction of only 5 % is proposed on the regulatory duty of import of raw materials along with very few other reductions.
Finance minister allocated 27.34 percent of total budget for social infrastructure of which 24.37 percent allocation will go to human resource development (education, health and others), 30.99 percent for physical infrastructure of which 12.68 percent will go to overall agriculture, 11.43 percent for overall communication sector (roads, railways, bridges and others) and 5.36 percent for power and energy sector. 25.30 percent of total allocation has been proposed for general services and 4.78 percent for PPP, financial assistance and equity investments in various financial institutions, 11.05 percent for interest payment and the rest 0.54 for net lending and other expenditures.
Key highlights of the budget
1) The existing slabs of Customs Duty (0%, 1%, 5%, 10%, 15%, and 25%) on import stage will remain same in fiscal year 2018-19. However, government also aiming to decrease the use of Regulatory Duty (3%) and Supplementary Duty which is used to increase revenue.
2) For Iron and Steel sector, the minister has proposed reduction on Regulatory Duty of 5% on import of raw materials i.e. Ferro Alloys from 15% to 10%. He also proposed reduction of specific customs duty on import of Sponge Iron (iron having a minimum purity by weight of 99.94%, in lumps, pellets or similar forms) from Tk.1000/MT to Tk. 800/MT.
The Finance Minister said “in recent years raw materials import for iron and still industries has been decreased. Consequently, the revenue from this sector has been decreased drastically. To keep both the production cost and market price of MS Rod low, duties have been reduced.”
3) The minister proposed to reduce Custom duty from 25% to 5% on Flat rolled products (Concession will be given to VAT registered refrigerator, air-conditioner and compressor manufacturing industry).
4) The Finance Minister also proposed to grant concession on raw material of motorcycle and removed existing RD from Angles, shapes and sections and Welded angles, shapes and sections. In the existing budget it was charged at the rate of 10%.
5) The existing description of Graphite paste imported by VAT registered ferro alloy manufacturing industry to Graphite or carbon electrode paste imported by VAT registered ferro alloy manufacturing industry.
Proposed Changes in Duty Structure are:
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