Confusion over law forcing RMG makers to pay 15% VAT on port services | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Saturday
June 14, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
SATURDAY, JUNE 14, 2025
Confusion over law forcing RMG makers to pay 15% VAT on port services

NBR

Shahadat Hossain Chowdhury
01 January, 2024, 09:00 am
Last modified: 01 January, 2024, 01:51 pm

Related News

  • Relationship between Bangladesh, India cordial, but largely depends on governments: BGMEA president tells ANI
  • Lowering targets and missing those: Is splitting NBR enough to break the cycle?
  • Dhaka markets sluggish post-Eid: Chicken, vegetable prices fall
  • People won't accept election date before July Charter is implemented: NCP on Yunus-Tarique meeting
  • CA Yunus discusses economic recovery, Rohingya education with ex-British PM Gordon Brown

Confusion over law forcing RMG makers to pay 15% VAT on port services

NBR says it will soon clarify to the port authority to continue VAT waiver for RMG exporters

Shahadat Hossain Chowdhury
01 January, 2024, 09:00 am
Last modified: 01 January, 2024, 01:51 pm
A World Bank Group study revealed that a reduction of container release time in CTG port by one day would increase export by 7.4%.
Photo: Mohammad Minhaj Uddin
A World Bank Group study revealed that a reduction of container release time in CTG port by one day would increase export by 7.4%. Photo: Mohammad Minhaj Uddin

Highlights

  • NBR on 13 June 2019 granted a 100% VAT exemption on port services
  • But in the Finance Act of 2022, the VAT exemption benefit was withdrawn
  • Chittagong Port has been imposing 15% VAT since 27 September 2023
  • NBR official says the confusion will end soon

A confusion over a tax provision has been costing readymade garment exporters 15% VAT on services for over three months during imports and exports at the Chittagong Port. 

The tax, being levied on service charges such as container storage rent, unstuffing charges and river dues, causes an additional expenditure of over Tk1,000 per TEU (twenty-foot equivalent unit) container, apparel industry owners say. 

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

In two statutory regulatory orders (SRO) issued in 2019 and 2021, the National Board of Revenue (NBR) granted a 100% VAT exemption on port services for both imported and locally manufactured goods for fully export-oriented industries and export processing zones.

But in the Finance Act of 2022, the "zero" rate of VAT on services relating to "transportation of international transport services and supplies relating to loading on and unloading from ships" was withdrawn with effect from 1 July 2022.

On 4 July 2022, the Chittagong Customs, Excise, and VAT Division sent a letter to the chairman of the Chittagong Port Authority, requesting VAT collection on the two services. In accordance with the letter, the port authorities have been collecting the 15% VAT since 27 September 2023.

Apparel exporters say 15% VAT irrational

Garment factory owners say it is unreasonable to collect VAT despite the NBR's tax exemption in the SRO. Moreover, there is no involvement of local importers-exporters with port service charges. This relates to local agents of international transport operators or shipping agents paying terminal handling charges. But port authorities are collecting VAT from garment factory owners instead of shipping agents.

According to BGMEA data, approximately 45% of containerised goods imported through the Chattogram port consist of raw materials for the garment manufacturing industry. Besides, most of the export products are readymade garments.

BGMEA Vice President Rakibul Alam Chowdhury told The Business Standard that if the 15% VAT exemption on port services for the garment industry is not maintained, RMG exporters will lose competitiveness.

The VAT on port charges is a further blow to the garment industry, which is already facing challenges from the global economic slowdown, he said.

"At this critical moment, it is in no way feasible. Furthermore, it is not relevant to engage with garment factory owners. To sustain the viability of the garment export business, it is imperative to waive the collection of VAT on garment industry operations," said the BGMEA vice president.

On October 1, the BGMEA, led by its President Faruque Hassan, held an emergency meeting with the NBR to discuss the cessation of the 15% VAT. Subsequently, on 4 October 4, BGMEA First Vice President Syed Nazrul Islam sent a letter to the Chittagong Customs Excise and VAT Commissioner Syed Mushfequr Rahman requesting the suspension of the VAT collection. In this regard, the VAT commissioner on 30 October, sent a letter to the office of the NBR member (VAT policy) requesting its directive.

Syed Mushfequr Rahman told TBS, "According to the SRO, the 15% VAT is exempted, but the benefit was cancelled by the Finance Act. As there is a confusion on the matter, we sought the NBR's directive in this regard. We hope that we'll get an instruction from the revenue board soon."

Zakia Sultana, NBR member (VAT policy), told TBS, "We will send a clarification to the port authorities in this regard soon so that they keep the readymade garment export sector out of the purview of the VAT. As a result, the RMG exporters will continue enjoying the VAT waiver."

But other sectors will have to pay the VAT on services at the port, she clarified.

Economy / Top News

RMG Exports / vat / NBR / Bangladesh

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Security personnel react at an impact site following a missile attack from Iran on Israel, in Tel Aviv, Israel, June 13. REUTERS/Itay Cohen
    Over 80 killed on both sides as Iran, Israel continue missile strikes
  • Vehicles were seen stuck on the Dhaka-Tangail-Jamuna Bridge highway due to a traffic jam stretching 15 kilometres on 14 June 2025. Photo: TBS
    15km traffic jam on Dhaka-Tangail-Jamuna Bridge highway as post-Eid rush continues
  • File photo/Reuters
    World Bank approves $250m to bolster public sector performance in Bangladesh

MOST VIEWED

  • Energy adviser Fouzul Kabir Khan with other government officials during a visit to Sylhet gas field on 13 June 2025. Photo: TBS
    I would disconnect gas supply to every home in Dhaka if I could: Energy adviser
  • BNP Acting Chairperson Tarique Rahman and Chief Adviser  Muhammad Yunus meet at Dorchester Hotel in London, UK on 13 June 2025. Photo: CA Press Wing
    National polls possible in 2nd week of February, agree Yunus, Tarique in 'historic' London meeting
  • Rescuers work at the scene of a damaged building in the aftermath of Israeli strikes, in Tehran, Iran, June 13, 2025. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS
    Tehran retaliates with 100 drones after Israel strikes Iran's nuclear facilities, kills military leaders
  • From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
    From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
  • UK Prime Minister Keir Starmer, Chief Adviser Muhammad Yunus
    Disclosure of unconfirmed Yunus-Starmer meeting shows ‘diplomatic imprudence’: Analysts
  • Flight AI 379 had landed. File Photo: Hindustan Times
    Day after Ahmedabad crash, Air India flight makes emergency landing in Thailand after bomb threat

Related News

  • Relationship between Bangladesh, India cordial, but largely depends on governments: BGMEA president tells ANI
  • Lowering targets and missing those: Is splitting NBR enough to break the cycle?
  • Dhaka markets sluggish post-Eid: Chicken, vegetable prices fall
  • People won't accept election date before July Charter is implemented: NCP on Yunus-Tarique meeting
  • CA Yunus discusses economic recovery, Rohingya education with ex-British PM Gordon Brown

Features

Photos: Collected

Kurtis that make a great office wear

22h | Mode
Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

2d | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

3d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

5d | Features

More Videos from TBS

How ready is the new IRGC chief to give a befitting reply to Israel?

How ready is the new IRGC chief to give a befitting reply to Israel?

25m | TBS World
Iran says nuclear talks with US ‘meaningless’ after Israel attack

Iran says nuclear talks with US ‘meaningless’ after Israel attack

1h | TBS News Updates
CA Yunus returns home from London

CA Yunus returns home from London

1h | TBS Today
Israeli warplanes shot down; pilot detained by Iran

Israeli warplanes shot down; pilot detained by Iran

2h | TBS News Updates
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net