Staff Reporter :
The Bangladesh Petroleum Corporation (BPC) urged the National Board of Revenue (NBR) to waive the additional Value Added Tax (VAT) on its refined fuel-oil stored with the Eastern Refinery Limited (ERL).
“BPC has to store the refined fuel oil, especially octane, in the ERL storage just due to space constraints facing the marketing companies Padma, Meghna and Jamuna,” said a senior energy ministry official.
“Basically the ERL refines crude oil. It does not add any value to the refined BPC oil, which is released from the ERL storage as it is, ” the official added.
The state owned BPC unloads the imported fuel from ships in a bid to avert demurrage and then keeps it in the ERL storage because of the space constraints, the official said.
The NBR is charging the additional VAT on the imported refined oil of the BPC at the rate of Tk 7.91 per litre of octane and Tk 4.19 and Tk 3.49 per litre of diesel and furnace oil respectively, official sources said.
BPC Chairman Md Yunusur Rahman recently sent a letter to the NBR requesting it to sit in a meeting to discuss the issue.
According to the existing VAT law, companies are supposed to pay VAT at the stage of sales, if they add value to any imported products or change them. “The NBR is charging the additional VAT
on the refined fuel, when it is being supplied to the marketing companies from the ERL storage,” the official said.
The BPC was supposed to pay VAT on refined fuel at the import level, not at the sales level, he said. On the other hand, the ERL is paying VAT at the rate of 15 per cent at the time of supplying refined oil that it imports as crude oil.
Already burdened with the financial losses incurred on account of import of fuel oil, the additional VAT on the BPC’s refined oil in the ERL storage has worsened the financial capability of BPC, he added. Import of petroleum products is one of the major revenue earning sectors of the NBR that fetches 25 per cent of the customs duties.Import of fuel oil is subject to payment of 12 per cent customs duty (CD) and 15 per cent VAT at the import stage, the source said.
The Bangladesh Petroleum Corporation (BPC) urged the National Board of Revenue (NBR) to waive the additional Value Added Tax (VAT) on its refined fuel-oil stored with the Eastern Refinery Limited (ERL).
“BPC has to store the refined fuel oil, especially octane, in the ERL storage just due to space constraints facing the marketing companies Padma, Meghna and Jamuna,” said a senior energy ministry official.
“Basically the ERL refines crude oil. It does not add any value to the refined BPC oil, which is released from the ERL storage as it is, ” the official added.
The state owned BPC unloads the imported fuel from ships in a bid to avert demurrage and then keeps it in the ERL storage because of the space constraints, the official said.
The NBR is charging the additional VAT on the imported refined oil of the BPC at the rate of Tk 7.91 per litre of octane and Tk 4.19 and Tk 3.49 per litre of diesel and furnace oil respectively, official sources said.
BPC Chairman Md Yunusur Rahman recently sent a letter to the NBR requesting it to sit in a meeting to discuss the issue.
According to the existing VAT law, companies are supposed to pay VAT at the stage of sales, if they add value to any imported products or change them. “The NBR is charging the additional VAT
on the refined fuel, when it is being supplied to the marketing companies from the ERL storage,” the official said.
The BPC was supposed to pay VAT on refined fuel at the import level, not at the sales level, he said. On the other hand, the ERL is paying VAT at the rate of 15 per cent at the time of supplying refined oil that it imports as crude oil.
Already burdened with the financial losses incurred on account of import of fuel oil, the additional VAT on the BPC’s refined oil in the ERL storage has worsened the financial capability of BPC, he added. Import of petroleum products is one of the major revenue earning sectors of the NBR that fetches 25 per cent of the customs duties.Import of fuel oil is subject to payment of 12 per cent customs duty (CD) and 15 per cent VAT at the import stage, the source said.
