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Country's age-old household utensils manufacturing sector is facing a severe uncertainty due to the constant harassment allegedly by Value Added Tax (VAT) officials to realise unauthorised levies.
The VAT officials are forcing them and, in some cases, seize their products in Dhaka and other parts of the country reportedly by misinterpreting the concerned government regulations.
They have seized final aluminium goods and other raw materials at some factories in Dhaka and said that they would not release it as long as the owners pay VAT, sources said.
According to the statutory regulatory order (SRO), VAT is waived in case of manufacturing of household utensils and the sector is enjoying the same for long. Manufactures said that the government excluded the sector from VAT at the manufacturing stage, considering the adverse impact of the VAT on essential aluminium items that are used by the common people.
Sources at the manufacturers level said a large number of such units across the country have been closed down over the last couple of weeks due to the drive conducted by VAT teams, resulting in unemployment of thousands of workers and creating an artificial crisis of utensils in the local market.
Manufactures hinted that imported and substandard utensils would flood the local market, capitalising on such a shortfall of local products. Furthermore, more local plants across the country will be forced to close down operations.
VAT circles have been issuing notices against the aluminium manufacturing utensils units over last couple of weeks.
They are reportedly threatening the owners to sue in accordance with existing tax evasion laws if they fail to pay VAT in time in accordance with the terms mentioned in the notices. Manufacturers said that the concerned SRO does not allow collection of VAT on such important household items.
Rezaul Hoque, assistant secretary of customs, excise and VAT at Sutrapur division in the city said that they issued notices upon the manufactures and took other actions simply to realise VAT on the aluminium ingot.
"We'll stop harassing them if the National Board of Revenue (NBR) explains clearly on the matter. We did it after scrutinising the SRO", he added.
Manufacturers said that aluminium ingots and scrap are taxable at the import stage.
At the manufacturing stage, aluminium ingots and scrap have to be melt into slabs, and then sheets and circles are made according to different sizes. And finally the circles are used for making aluminium utensils and cookwears, manufactures added.
"Aluminium circle is one of the pre-stages for making household utensils. And there is no use of it other than making household items" one manufacturer in the city said.
President of Bangladesh Aluminium Manufacturers Association Obaidur Rahman said aluminium circles are the pre-stage for making this item and VAT cannot be imposed on it. The whole concept of exemption of VAT from aluminium utensils at the manufacturing stage will be futile if they levies are made on aluminium circles.
"They are trying to collect VAT by misinterpreting the concerned SRO and, thus, are trying to destroy the country's one of the old and important manufacturing sectors", he said.
Leaders of the association alleged that the drive for realising VAT by officials concerned would encourage some vested quarters to flood the local market with smuggled and unhygienic utensils like low grade steel utensils from the neighbouring countries.
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