The apex apparel body has sought massive value-added tax (VAT) waiver covering its 38 types of services, including consultancy charge, compliance-audit evaluation, and Corporate Social Responsibility (CSR) spending.According to a wish list, the services also include entertainment funds for workers and building-construction expenditure.In a recent letter, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president urged the National Board of Revenue (NBR) to consider waiver of the VAT.The BGMEA also sought VAT exemption on power and electricity bills that they got refund later.RMG exporters have paid the tax on those 38 types of services since 2008.However, supplier and security service and transportation contractors have been VAT-free since the fiscal year 2014-15.”RMG exporters have to pay a significant amount as VAT on those services. Payment of the huge amount is becoming difficult in the current unfavourable business situation,” said the BGMEA president, Siddiqur Rahman, in the letter.The exporters enjoy VAT exemption at a rate of 80 per cent on power bill and 60 per cent on water bill at production stage but getting refund of the amount is cumbersome, he pointed out.Exporters have to submit relevant documents, spend time to get refund of the money from Duty Exemption and Drawback Office (DEDO), he said.”Many of the exporters could not realize the paid VAT due to this complex procedure,” he added.The BGMEA has sought full exemption of the VAT on electricity and water bills exporters pay to mitigate the hassle.The sector’s apex trade body said production cost of RMG had increased by 18 per cent in the last two years as prices of RMG products dropped due to devaluation of the euro, Brexit and US elections.In January-April 2017 period, RMG export dropped by 0.78 per cent while India posted 14.29 per cent growth followed by Vietnam 9.90, and Pakistan 5.30 per cent.During the last 10 years, average RMG-export growth of Bangladesh was 13 per cent.Exporters are facing difficulties in sustaining global competition, the letter stated.Laboratory-test charge, courier-service charge, purchase of fuels for vehicles and generators of export-oriented industries, evaluation, ethical audit charge, law consultancy charge etc are among other services on the list of 38 products wanted VAT-free.As per the existing VAT law 1991, all other services of RMG exporters are VAT-exempted.
