Businesses want change in definition of wrapping goods

Al Amin :
The entrepreneurs of the packing industry want change in definition of wrapping materials as they are incurring losses.
The National Board of Revenue (NBR) had reduced Advance Income Tax (AIT) for raw materials used in industries to 4 per cent from 7 per cent to facilitate the manufacturers, the entrepreneurs said.
But the manufacturers of the packaging industry are not getting the tax-cut facility as the wrapping goods are being considered as finished products, they said.
They said the total amount for 12 per cent (7 per cent and 5 per cent) AIT at sale and import stages respectively is much higher than the annual tax of a company, which is a big burden and are falling the packing manufacturers into a deep crisis.
Following this, the manufacturers of the packing industry demanded change in definition of wrapping goods and consider the products as raw materials instead of finished goods.
They further said the packing materials have been included in the definition of raw materials as the provision 18a of Value-Added Tax (VAT) and Complementary Duty Act 2012.
So, there is enough chance of considering the wrapping goods as raw materials by keeping adjustment with the definition of raw materials between the Tax and VAT law under the revenue board, they said. Md Arshad Ali, President of the Packaging Industries Association of Bangladesh (PIAB), told The New Nation, “A provision was incorporated in current fiscal policy by fixing four per cent AIT on raw materials for using industries, which made us happy.”
“But, the revenue board on September 14 issued another circular and said the packaging materials will not be considered as raw material. This has created discrimination among the manufacturers of the packing goods and we are also facing financial losses,” he added.
He further said all the ingredients used in packaging industry are imported and the manufacturers are to pay duty, VAT, Advance Tax during imports of the raw materials.
The government earns crores of taka as revenue from the sector every year, Arshad said.
NBR officials, however, said the wrapping goods manufacturers have to change mode of business operation in order to get the tax-cut facility under the existing law.
Otherwise, their goods will be considered as finished products, they said.
However, they can apply to the NBR for changing definition of the wrapping materials on behalf of their association, the officials said.
The entrepreneurs of the sector said that they are passing through a difficult time due to higher inflation in the global markets and the acute dollar crisis in domestic markets.
Under this situation, the sector will fall further crisis, if the NBR does not take the situation into its consideration.