DOT Desk: Liquefied Petroleum Gas (LPG) cylinder manufacturers, in the ensuing budget, are likely looking at increased duty on raw material imports and a possible addition of 15% VAT, as part of the government’s move to curtail certain industry benefits aiming to boost revenue,reports TBS.
The local cylinder manufacturers will also see the existing 5% VAT raised to 7.5% at the production stage, according to finance ministry sources.
The move, limiting the benefit to import at reduced rates, which officials say the sector has long been enjoying and by now has become self-sufficient, will in effect bite into people’s wallets, feared industry stakeholders.With increased import duty and added VAT on cylinder raw materials, the price of LPG cylinders may increase at the consumer level, industry insiders say.
The reduced VAT rate of 7.5% (on iron and steel) for the local manufacturers, however, may stay in place for one year.Currently, the entrepreneurs of this sector pay 3% customs duty on the import of steel sheet and welding wire, which are key raw materials for LPG cylinders. Besides, the sector at present enjoys VAT exemption. And, general importers have to pay 5% customs duty and 15% VAT.
Nayeemul Islam khan
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