Bangladesh steel millers oppose 15pc VAT on rod
The Daily Star reported that Bangladesh steel millers warned of slowdown in infrastructure development and housing construction in both rural and urban areas if 15 percent VAT is slapped on rod under the new law. The steel millers said that at present, only Tk 900 is levied on each tonne of rod as VAT. The amount of VAT, also known as consumption tax, will rise to Tk 7,500 at a market price of Tk 50,000 per tonne once the new law comes into effect from July 1.
Mr Manwar Hossain chairman of the Bangladesh Auto Re-Rolling & Steel Mills Association at a press conference held at the National Press Club said that “The steel industry will suffer.”
Infrastructure development and housing construction will be affected for the imposition of the 15% VAT. Subsequently, he called for bringing down the rate to 3-5%.
Industry operators said the sector could keep up with the country's fast growing construction demand because of the reduced VAT rate on rod.
The country's annual demand for rod is estimated to be more than 25 lakh tonnes, according to EBL Securities' 2016 research report on the steel sector.
In recent years, steel makers started expanding their capacity to make billet, the main raw material for rod, in order to cut the cost of production by reducing import dependence.
The country's billet production capacity more than doubled to nearly 35-40 lakh tonnes per year, accounting for more than two-thirds of the annual demand, according to industry operators.
Source : The Daily Star