The government has taken an initiative to formulate a gold import policy, aiming to check its smuggling and help boost duty collection from the sector.
As per the proposed policy, the VAT registered entities will only be allowed to import gold through opening Letters of Credit (LCs).
“If everything goes well, the Finance Minister will make an announcement about the policy in the upcoming national budget for the 2018-19 fiscal year,” a senior official at the Finance Ministry informed, reports UNB.
The government has formed a nine-member committee for formulation of the policy, and the committee has already held several meetings.
“The gold import policy will be finalised after reviewing the recommendations of the committee,” the Finance Ministry official said.
Finance Minister AMA Muhith in his budget speech for 2017-18 fiscal termed the jewellery a traditional business sector of Bangladesh.
“But due to the absence of a hard and fast rule for the import of gold, the jewellery sector is not flourishing in the way we think of. So, the association of this sector has made various proposals in order to formulate a realistic guideline for the import of gold and make the industry a business-friendly one,” he said.
Muhith said the government has decided to prepare a time-befitting policy for gold import after discussions with relevant agencies. “This will help flourish this sector as well as create export market abroad. I hope we can formulate such a policy within this calendar year.”
According to sources, the committee is now examining the proposals from the associations of jewellery sector of the country and it will be finalised before the budget.
They said a paper, prepared by the ministry for the Finance Minister, said the specific duty on the import of gold bars might be scrapped, if necessary, after the full implementation of the new VAT and Supplementary Duty Act.
According to the paper, the import of gold and silver will be done as per the regular import system, not by the baggage rule or the clearance certificate from the central bank.
It says the import of gold and silver will be done only by LC, and the VAT registered entities will get the scope.
As per the existing law, anyone can import gold or silver. The VAT registered entities can import gold through LC giving four percent duty over the total price to the government exchequer.
Besides, anyone can import gold or silver fulfilling the Foreign Exchange Regulation Act 1947.
Under the Baggage Rules, a certain portion of gold can also be brought.
But after the independence there is no instance of importing gold by any business entity through opening LC, officials told.
The jewellery traders always complain that they have to face various complexities and hassles if they import gold through proper channel.
They said they have to disclose the source of the business, where and how the gold will be sold before its import. They also have to give the assurance that they will sell the entire imported gold.
According to them, they have to take NOC from Commerce Ministry first for the import of gold and then they have to take the Import Registration Certificate from the Import-Export Controlling authority.
After having all those, they have to go to a bank to open an LC but no bank will open the LC without an NOC from the Bangladesh Bank, traders further alleged.
“As a result, the jewellery traders became dependent on smugglers, depriving the national exchequer of import duty,” said a trader preferring not to be named.