NBR removes tax on wheat imports

The National Board of Revenue has removed the advance income tax (AIT) on imported wheat after it was found that certain businesses were importing common varieties of the grain under the guise of ‘durum wheat’ to enjoy zero-duty benefits.

According to NBR officials, importers claimed their shipments were durum wheat to avoid the 5 per cent AIT applicable for more common wheat.

These anomalies surfaced after the Customs Intelligence and Investigation Directorate (CIID) found that wheat was being imported under the ‘wrong’ Harmonised System Code, a standardised numerical method for classifying traded products.

In a letter to the NBR in October, the Customs House Chattogram said the CIID suggested that duty assessments on imported wheat be done by specifying the type of grain through testing at the Bangladesh Wheat and Maize Research Institute (BWMRI).

As such, the customs house sent samples of the imported wheat to state-run BWMRI for testing.

It was then found that the imported cereal was a common type, not durum wheat, for which there are no AIT charges, the Customs House Chattogram said in a statement.

It also sought NBR’s directive on whether to release the imported wheat if the tax is paid.

“The NBR previously allowed importers to have the food grains released based on bank guarantees after the detection,” said a senior official of the NBR seeking to remain unnamed.

Later, amid pleas from businesses, the tax authority decided to withdraw the advance income tax on all sorts of wheat. However, the NBR did not waive the AIT for grains imported earlier.

“There will be no AIT on wheat imported following the notification. We have removed the tax for the benefit of people,” the official said.

Bangladesh highly depends on imported wheat to meet its growing demand for flour-based foods, including biscuits and noodles.

The country imported 64.34 lakh tonnes of wheat in fiscal 2019-20, which was 87 per cent of its annual consumption of 74 lakh tonnes, according to the food ministry and the US Department of Agriculture.

As of December 10, 22.20 lakh tonnes of wheat was imported year, data from food ministry showed.

The Daily Star

Tags: NBR, tax on wheat imports