The government has withdrawn the value-added tax (VAT) on liquefied petroleum gas (LPG). The information was confirmed to the media on Tuesday (16 February) by Md Al Amin Sheikh, Public Relations Officer of the National Board of Revenue (NBR).
In a statement, he said that under the existing system, a 7.5 per cent VAT was imposed at the local production and trader levels of LPG, while a 2 per cent advance tax was required at the import stage. To keep the LPG market stable and affordable for consumers, as it is an essential commodity for both industrial and household use, the government has decided, in the public interest, to withdraw the VAT burden on LPG.
According to the statement, following an application from the LPG Operators Association of Bangladesh and a recommendation from the Ministry of Power, Energy and Mineral Resources, the government issued two separate notifications on 16 February. The notifications withdrew the 7.5 per cent VAT at the production and trader levels and the 2 per cent advance tax at the import stage until 30 June. Instead, a 7.5 per cent VAT has been imposed at the import stage.
The statement further said that by imposing a 7.5 per cent VAT at the import stage and withdrawing the 7.5 per cent VAT at the local production and trader levels, VAT will no longer apply to value addition at the local production and sales stages after import. As a result of the two notifications taking effect, the overall VAT burden on consumers purchasing LPG is expected to decrease by approximately 20 per cent compared with the previous system.