Photo: Collected
In the proposed budget for the FY 2024-2025, Finance Minister Abul Hassan Mahmood Ali suggests a 5 per cent customs duty on equipment imports for Rampal Power Plant, rental power companies, and other private power generation firms. Currently, these companies enjoy duty-free imports of plant, equipment, and erection materials. As part of tax expenditure rationalization, the FM recommends reducing this benefit and imposing a 5 per cent customs duty. The proposal is set to remain in effect until June 30, 2028.
In the new budget, Finance Minister proposes allocating Tk 1,087 crore for the energy sector, potentially slowing down local exploration efforts. This may lead to increased imports of primary fuels such as coal, LNG, furnace oil, and other fuel oils, resulting in higher power prices.
Prof. Shamsul Alam, a prominent energy expert, criticised the decision to allow investment by Rampal, rental, and private sector power plants, stating that these plants have already inflated the cost of power generation. He warns that additional import costs will further drive up power prices.
In addition, LED lamp and energy saving lamp manufacturing industries can import their raw materials at 0 percent import duty under a notification. As part of the tariff rationalisation initiative, the FM proposes to impose 10 percent import duty on the raw materials.
Farhan Noor, General Secretary of CNG Association told the Daily Messenger “As the import cost will rise, so people have to consume at a higher price. Besides, consumer will be reluctant to change the LPG cylinder that will increase the accidents.”
However, to align the value of the furnace oil with the international market price, Finance Minister in his proposed budget, proposes to fix the minimum value for furnace oil as $480 per Metric Ton (MT).
Currently, synthetic lubricating oil is increasingly being used in different automobiles including hybrid cars and other modern machineries. Despite the high price in international market, customs valuation of this product has become difficult due to non existence of minimum value.
To overcome this problem and to rationalize the value in line with the international market price, the finance minister proposed to set the minimum value for synthetic lubricating oil, mineral lubricating oil and raw material of lubricating oil i.e., base oil. Besides, to align the value of the furnace oil with the international market price he proposes to fix the minimum value for furnace oil as $480 per Metric Ton (MT).
And the finance minister in his proposed budget, proposed for the CNG/LPG filling station’s equipment import duty to rise to 5 percent from 3 percent.
At present, materials used for establishing or operating CNG/LPG stations can be imported at a concessionary duty of only 3 percent. He proposed reducing this facility a bit and recommend to increase the customs duty to 5 percent for imports under this notification.
Messenger/Disha
