BSC seeks tax waiver

Bangladesh Shipping Corporation (BSC) has again sought tax-VAT waiver against its procurement of vessels over next ten years, as the amounts will run into billions and affect its bid for 'survival', officials said.

This is for a second time in a year it applied for the complete tax exemption as the revenue board did not respond to the state-run shipping corporation's prayer, they added.

The Ministry of Shipping (MoS) recently forwarded the BSCs letter to the National Board of Revenue (NBR) requesting it to consider the plea.

Earlier, the corporation was granted an opportunity to make deferred payment of all types of charges at Chittagong seaport for an indefinite period as part of a government move to help the state flag carrier sustain.

It would not have to pay the due charges, since 2011, at the country's prime seaport until the new six vessels, under construction in China, join its fleet and its financial condition improves.

"Against the procurement of only six vessels with Chinese funds we have to pay nearly Tk 5.0 billion as tax and VAT from our own pocket. It is very tough for us to make the payment," BSC managing director Yahya Syed told the FE.

He said the total tax and VAT on vessel imports stands at around 25 per cent of their price.

"We want to make a turnaround. The government is helping us to recover. So, we want waiver in this case, too," Mr Syed said.

The Exim Bank of China is funding the procurement of three product oil tankers and three bulk carriers at a cost of US$184.50 million. These are under construction in a Chinese shipyard and the BSC expects them to start joining in its fleet in mid-2018.

The VAT and other taxes were not included in the Exim Bank's loan amount. The BSC is liable for the payment from its own coffer.

The corporation, which is entrusted with several responsibilities, including carrying majority portion of fuel oils for Bangladesh Petroleum Corporation (BPC), has got only a few vessels.

Presently, it has a mixed fleet of five vessels with a carrying capacity of nearly 0.076 million tonnes. The fleet comprises one container vessel, two multipurpose cargo vessels and two lighter tankers.

Apart from the six vessels, the BSC is also negotiating procurement of eight more vessels with Chinese funds worth Tk 20 billion.

According to BSC officials the corporation has set a target of procuring 21 vessels by 2021 in line with government's Vision-2021.

It has planned to carry entire load of coals Rampal power plant will need once it goes into operation. The BSC is also getting prepared to buy mother product oil tankers for carrying petroleum fuels once the single-point mooring (SPM) is built in the Bay of Bengal from where petroleum products will be piped from mother vessels into onshore oil- storage tanks.

The corporation carries majority portion of fuel oils Bangladesh Petroleum Corporation (BPC) imports annually.  

Established in 1972, the BSC is entrusted with carrying bulk cargos, food-grain and crude oils, chartering, tramping and feeder services, unloading and providing agency service and ship repairing.

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