NN Online:
The National Board of Revenue (NBR) has announced that the metro rail service – a city’s popular public transport – will now be exempt from VAT.
A special order signed by National Board of Revenue (NBR) Second Secretary Barrister Md Badruzzaman Munshi announced the decision on Monday.
The order said metro rail services, including fares, have been exempted from VAT. This decision will remain effective until December 21 of this year.
Before the recent policy shift, the National Board of Revenue (NBR) had planned to impose a Value Added Tax (VAT) on metro rail tickets starting from the FY 2024-25.
An NBR official explained that, under existing laws, a 15 per cent VAT applies to both air-conditioned (AC) and non-AC railway services. According to Section 26 of the Value Added Tax and Supplementary Duty Act, 2012, no VAT exemptions are provided for passenger transport in AC or first-class non-AC rail services.
As the metro rail system is fully air-conditioned, a 15 per cent VAT would typically apply to its services, the official noted.
