Steel manufacturers have requested the government to reduce customs duty and advance income tax (AIT) on the import of raw materials of MS rod (Mild Steel rod), taking into consideration the current abnormal upward price trend of such materials in the international market.
They fear that prices of rod may increase if the existing duties are not reduced; besides, the country is likely to face a shortage of raw materials for producing MS rod locally.
Under the circumstances, the manufacturers have also requested the government to reduce value added tax (VAT) from the selling level of MS rod.
Bangladesh Steel Manufacturers Association (BSMA) made the appeal through a letter sent to the commerce ministry recently.
Local producers have to pay higher customs duty and taxes on the import of raw materials of MS rod.
"60-grade MS rod/rebar, or better quality, is being sold at Tk 70,000-78,000 per tonne which was Tk 60,000-65,000 even six months back," according to the association.
Therefore, BSMA proposed reducing customs duty to Tk 500 from Tk 1,500 per tonne.
It also recommended reducing AIT to Tk 300 from Tk 500.
Besides, the association also requested the government to reduce VAT to Tk 250 and Tk 500 per tonne, respectively, from two existing levels of Tk 1,000 and Tk 2,000.
Many big construction firms have currently reduced their working volume due to the increased prices of construction materials.
There is a shortage of raw materials-carrying containers due to restrictions imposed following the Covid outbreak. Meanwhile, shipping charges have also doubled, said the BSMA letter.
As a result, a stagnant situation prevails in the construction industry, said the association.
Simultaneously, tile factories, sand, cement, brick and stone businesses are facing a terrible situation, it added.
Currently, around 80/85 types of raw materials of MS rod have to be imported from the global market.
The prices of melting scrap now stand at US$550-590 in the international market; it was $300-350 in October 2020, according to the association. Prices of ferro alloys now stand at $1,400-1,450 from $800-850.