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The National Board of Revenue has waived 15 per cent Value Added Tax (VAT) on import of iron and steel-made Liquefied Petroleum Gas (LPG) cylinders.
To this effect, the revenue board issued a Statutory Regulatory Order (SRO), dated September 12, by exempting VAT.
VAT has been exempted following the request made by two local importers including Orion Gas Ltd to meet the growing demand for LP gas in the domestic market.
VAT exemption will be applicable to the cylinders having the capacity below 5,000 litres.
The government is encouraging household consumers to use bottled LP gas instead of piped natural gas due to speedy depletion of natural resources.
Officials expected that the prices of iron and steel cylinders which were widely used in the country both for household and commercial levels would come down at consumers' end due to waiver on import VAT.
The proposal of Orion Gas Ltd has been taken into account in line with directives of finance minister Abul Maal Abdul Muhith as well as considering the production capacity of local manufacturers.
Currently, domestic manufacturers can supply 20-25 per cent of total demand and the rest of required cylinders are imported.
Industry insiders said local producers of traditional LPG cylinders might face adverse competition from imported one due to the decision.
Local producers, however, enjoy VAT exemption on import of raw materials and different components of the product. They also enjoy VAT exemption at production stage.
Bashundhara Group, Omera, TK Group, among others, produce LPG cylinders in the country.