The revenue authorities in Bangladesh are all set to look into some key factors like payment of subcontracting bills in foreign currencies over apparel exporters’ plea for waiver of value-added tax (VAT) even as the VAT policy wing under the country’s National Board of Revenue (NBR) would also review whether there is any scope to consider subcontracting output as export.
Media reports maintained this adding in an official note to the customs bond wing, the VAT-policy section sought to know where an export-oriented industry having bonded- warehouse licence is allowed to supply product through subcontract as per law even if earlier in a pre-budget meeting with the NBR earlier, the BGMEA leaders had said one-third of the subcontracting companies are in financial distress due to taxes and VAT on their bills even as the apparel exporters requested the NBR to waive the VAT as some industries are surviving through subcontracting services.
Meanwhile, underlining that imposition of VAT taxes is unjust on subcontracting bill, Bangladesh Knitwear Manufactures and Exporters Association (BKMEA) Executive President Mohammad Hatem, reportedly, maintained it’s a common practice of some export-oriented industries to subcontract between each other to meet emergency requirement of fabrics.
