VAT exemption period on cooking oil extended before Ramadan

The companies have to pay 5 percent VAT now only at the import stage following the step-by-step exemptions

After increasing the price of cooking oil by Tk 8 per litre, the government has extended the value-added tax, or VAT, exemption period for three more months to keep the staple’s supply normal in the market.

Keeping the month of Ramadan in mind, the import-level VAT on all types of refined and unrefined edible oil along with soybean has been reduced to 5 percent.

The National Board of Revenue, or NBR, issued a notification in this regard on Sunday, extending the time for keeping VAT at 5 percent on all cooking oils from Dec 15 to Mar 31.

The revenue collecting agency had earlier exempted VAT along with import and supply-level duties and taxes on edible oil in order to control the soaring prices in the market.

Earlier on Oct 17, 15 percent VAT was exempted at the local production level and 5 percent at the business level for the supply of refined and crude soybean and palm oil.

In November, another 5% VAT was waived at the local production level. As a result of this exemption, companies will have to pay 5 percent VAT at the import level only.

The customs duty on the import of edible oil has already been reduced to zero by the NBR. In this case, there are no regulatory duties or taxes.

However, the customs duty was 10 percent for palm oil, which has already been reduced to 1 percent by the Statutory Regulatory Order, or SRO.

Finally, the same opportunity has been given to soybean and palm oil alongside crude sunflower and canola oil.

In addition, the import of crude sunflower and canola and refined oil of both products have also been exempted from the existing advance tax.

On Dec 9, the refiners announced to increase the price of soybean oil by Tk 8 per litre after consultation with the government due to the rising prices in the global market amid the supply crisis in the market.

However, the supply of oil in the market has yet to be normal completely.

The maximum retail price of bottled soybean oil has been fixed at Tk 175 per litre, open soybean and palm oil at Tk 157 per litre, and five-litre soybean oil at Tk 852.