Delhi wants duty-free benefit for billet export [ Tritiyo Matra News ]

Delhi wants duty-free benefit for billet export

Local July 25, 2016

New Delhi has requested Dhaka to give duty-free benefit in export of non-alloy steel billets to Bangladesh under the South Asian Free Trade Area, which, if given, will hurt the local industry, said National Board of Revenue officials.
They said the NBR in the budget for the current fiscal year of 2016-2017 scrapped the duty-free benefit for the product in case of import from the SAFTA countries through imposing 20 per cent regulatory duty and 15 per cent value-added tax in a bid to protect the domestic industry.
Until June 2, customs duty on import of the product was Tk 7,000 a tonne from which the Indian
exporters were exempted under the SAFTA, they
said.
The officials said that the commerce ministry reduced the import duty of the product to zero in case of import under the SAFTA which came into effect from January 2016 while the revenue board has been increasing the duty for the product to encourage investment in the sector in the country.
The commerce ministry took the step without considering the protection of the domestic industry and huge investment made by local entrepreneurs, they said.
In a recent letter to the foreign ministry, the Indian high commission in Dhaka requested the government to consider restoring the duty on the product to the earlier structure so as to enable the Indian exporters to be covered under the SAFTA which facilitates free trade in the SAARC region including that between India and Bangladesh.
NBR officials said that import of billet, a semi-finished steel product which is used as a raw material for producing MS rod, bar and other steel products, from India under the SAFTA experienced a sudden increase due to zero duty-benefit, causing huge revenue loss for the government.
Continuation of duty-free benefit in future may pose a threat to huge domestic investment in the sector, they said adding that some local companies including BSRM and Abul Khair Steel Mills made significant investment to produce billet.
The plants of both the companies may start their production soon and hopefully will be able to meet more than 90 per cent of the country’s annual demand for the product, according to NBR estimation.
The revenue board withdrew the existing specific duty of Tk 7,000 a tonne on import of the product from countries outside the SAFTA and imposed RD and VAT on import of the product irrespective
of the origin of the product to protect the domestic industry and create an even playing-field for exporters, a senior official of the NBR said.
The effective import duty now will be around Tk 11,500 a tonne and there will be no special benefit for the SAFTA, he said.
The Indian high commission has also forwarded the copy of the letter to the commerce ministry and the NBR.
In the letter, the high commission claimed that the new duty structure reduced the SAFTA benefit to the Indian exporters to nil and was adversely affecting their exports.
It also said that the new duty structure with an immediate effect provision also led the Indian exporters to a difficult situation as their goods were already in transit to Bangladesh.
The high commission also requested the government to examine the issue with a view to allowing the goods which were already in transit to be imported into Bangladesh under the previous duty structure.