09/05/2023 (New Age) - Edible oil refiners and wholesalers of the item are engaged in a tussle over the payment of the reinstated Value Added Tax, causing a delay in the supply of the commodity to traders from refineries.

The Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association has recently asked its buyers to pay additional money for edible oil supply from refineries as the 10 per cent VAT waiver facility on the commodity ended on April 30.

Wholesale businesses called refiners’ decision illogical, saying that VAT should not apply to the quantity they bought before April 30.

After issuing supply orders, refiners cannot stop the edible oil supply they sold earlier, they said.

Wholesale businesses threatened movement in Dhaka and Chottogram if refiners did not supply edible oil purchased before April 30 without VAT.

Refiners, however, said that they had no choice but to realise VAT from buyers on edible oil supplies after April 30 as the government reinstated the tax on the item from May 1.

Wholesale businesses said that they had bought edible oil to be supplied now, before April 30, and received supply orders after payment.

‘As per tradition, many wholesalers have already sold the item to other traders through transferring SOs. Now, refiners are denying supply of edible oil without payment of the newly returned VAT,’ Bangladesh Paikary Vojjaya Tel Babosayee Samity (Bangladesh Wholesale Edible Oil Business Association) president Md Golam Mowla told New Age on Tuesday.

He said that refiners had no right to claim VAT on items sold before the tax was reinstated.

Golam Mowla said that they had already held a meeting with refiners, including Md Fazlur Rahman, the owner of City Group, and demanded not to realise VAT on edible oil sold before April 30.

He claimed that several hundred trucks had been waiting at the mill gates in Dhaka and Chattogram for the past few days as refiners declined to supply edible oil to traders without realising the additional VAT amount.

‘If the refiners do not review their decision, the edible oil traders will go for a tough movement, and chaos may occur in the country’s edible oil market,’ Golam Mowla said.

In March 2022, the National Board of Revenue reduced the VAT on soybean oil and palm oil from 15 per cent to 5 per cent during imports until June 30, 2022.

NBR had extended the timeframe several times to keep edible oil prices stable in the local market amid the price hike in the global market.

In January, NBR extended the timeframe for the reduced VAT on edible oil for four more months until April 30.

Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association on May 3 issued a letter to the buyers saying that the refiners would realise VAT on the edible oil remained undelivered as the government reinstated the tax from May 1.

Responding to the BVOVMA letter, Bangladesh Paikary Vojjaya Tel Babosayee Samity on May 7 opposed the refiners’ decision.

The trade body said in its letter that wholesale traders always procure edible oil by paying taxes, and refiners pay the taxes to the government, but refiners enjoy all types of tax rebates, not wholesale traders.

The letter said that when the government waived 10 per cent VAT on edible oil supply and production, refiners did not refund the money to traders who bought the item before the tax facility was given and received the supply later.

Wholesale businesses have urged the BVOVMA to withdraw its ‘unethical’ decision to charge VAT on already sold but undelivered edible oil.

Taslim Shahriar, senior assistant general manager of Meghna Group of Industries, said that they had nothing to do but realise VAT during edible oil supply after May 1 as the tax waiver ended on April 30.

‘We have to pay VAT to the NBR once we deliver products from our stocks after April 30,’ he said.

Shahriar said that there was a rule to take delivery of edible oil within 15 days after issuing supply orders, and the wholesale traders should have taken delivery of the product as per the rules.

https://www.newagebd.net/article/201312/businesses-at-odds-over-edible-oil-vat