NBR proposes to impose tax on metro rail tickets

Staff Reporter :
The National Board of Revenue (NBR) has proposed to impose Value Added Tax (VAT) on Metrorail tickets, but the authority of the Dhaka Mass Transit Company Limited is not agreed with NBR’s proposal.
The Metrorail authority argued that not the elites, the common people travel on Metrorail.
It is known that the Commissioner of Dhaka South VAT Commissionerate Shaukat Ali Sadi wrote to Dhaka Mass Transit Company Limited (Metrorail Company) on January 22 calling them for the imposition of VAT.
In the letter, it was mentioned that 15 per cent VAT should be levied on the tickets of passengers travelling in metro rail’s air-conditioned coaches.
However, the Dhaka Metrorail Company has responded to the NBR’s letter in the first week of this month, sources said. In response to the letter, the Metrorail Company said that all classes of people board the metro rail with the same fare. Hence, VAT will not be applicable on such transport, sources said.
According to multiple sources, after receiving the reply from the Metrorail Company, a letter has been sent to the National Board of Revenue (NBR) seeking instructions in this regard from the Dhaka South VAT Commissionerate, but no instructions yet to be given.
As per the VAT Act, any air-conditioned railway ticket is subject to impose 15 per cent VAT, but the Metrorail is fully air-conditioned and a public transport.
Meanwhile, Abdur Rauf, Director of the Dhaka Metrorail Company and Company Secretary told journalists, “According to the VAT Act, VAT is levied on railway air-conditioned coaches or AC tickets. The philosophy in this case is that non-AC tickets are also available in the same train. There is also a class distinction in tickets. Generally elite class passengers buy AC tickets and VAT is subjected in their cases”.
Referring to the same type of ticket at the same price for everyone in the metro rail, Mohammad Abdur Rauf said, ‘Our aim is that people of all classes, including low-income, lower-middle-income people, will travel from one place to another place in faster way on the metro rail. So, it will not be right to impose VAT.
The fare of Metrorail will increase further if VAT is imposed, he observed.