Muhith okays VAT waiver on OMS dealers’ commission

The National Board of Revenue has decided to waive value-added tax on dealers’ commission which they get for operating open market sales or other fair price programmes of the government, officials said.
They said that the revenue board early this week sent a draft statutory regulatory order in this connection to law ministry for vetting after getting approval of the finance minister, Abul Maal Abdul Muhith.
The decision was taken to facilitate smooth operation of the OMS and fair price activities, they added.
Earlier on July 28, the food ministry requested the revenue board to withdraw VAT on dealers’ commission saying that regular operation of the OMS and other fair price activities under social safety net programme were being hampered due to imposition of such tax.
According to the existing VAT act, a 15 per cent VAT is applicable on dealers’ commission and such tax is deducted at source.
The ministry said that the dealers of OMS and fair price activities got Tk 1.50 for per kilogram of rice and Tk 1 for per kg of wheat as operating cost or commission from the government.
The dealers meet the cost of taking out food grains from godown, transportation, paying shop rent and workers wages and other expenditure from the commission, it said.
A high official of the NBR on Thursday told New Age that they took prompt steps to waive the sector from paying VAT considering the importance of the dealers’ role in food grains distribution among the poorest section of the society as the programme has significant contribution to poverty reduction.
Generally, food grain distribution and procurement of paddy and rice enjoy VAT exemption, he said.
A SRO will be issued soon once the vetting is completed, he said.
The government introduces OMS and fair price programmes to provide food support to the low-income group of people and restrain food prices on the market.
Currently, rice and wheat are selling at each union of the country under the OMS while fair price programme is run for low-paid government employees.
Prime minister Sheikh Hasina on Wednesday inaugurated another programme called ‘food-friendly programme for ultra poor’, for providing rice to 50 lakh poor people at Tk 10 per kilogram during the lean season.

News Courtesy: www.newagebd.net