Bangladesh Jewellers Samity (BJS) has urged the government to lower value-added tax and customs duty on gold in the upcoming national budget.
BJS made this call for the “survival of the country’s gold sector affected by the coronavirus pandemic.”They want reducing customs duty on per bhori of gold to Tk 1,000 from the existing Tk 2,000 and VAT to 1.5 percent from the current 5 percent.
They said the rates are higher than those any other neighboring country.
“We are losing a market of Tk 20 billion due to inconsistency of VAT rate with neighboring countries. If the VAT rate is cut to 1.5 percent, we will be able to competitive prices, which will help the business rebound,” said the BJS.
The BJS leaders claimed that the government revenue collection will also increase if the rates are lowered and the local gold business will bounce back.
While talking to the Daily Sun, BJS president Enamul Haque Khan on Tuesday said many Bangladeshis were travelling abroad, especially to India, to purchase jewellery items as the foreign markets offered lower prices than here.
“The gold prices have skyrocketed during the last one and a half years. Also, the number of weddings, birthdays and other social events have also come down due to the pandemic,” said Enamul Haque Khan who also owns Sharmeen Jewllers. “The jewellery business is plunging into a recession in the domestic market while many prefer to buy gold from India, Thailand and Singapore at better lower prices,” he added.He said in such a situation the jewellers sought special benefits in the upcoming national budget to help the business survive and recover the losses.
BJS general secretary Dilip Kumar Agarwala said, “The VAT rate in India is 3 percent. Bangladeshi buyers feel encouraged to buy gold ornaments from India as the country's visas are available.
According to the current VAT rate, a customer has to pay Tk50,000 as VAT if he bought gold jewellery worth Tk 10 lakh while the customers will charge VAT of TK 30000 for purchasing same amount of gold ornaments from India, he said. Though currently Bangladeshi people are not going to India as there is a travel ban due to the pandemic. However, once the situation improves, the people will prefer going India to buy gold ornaments, Agarwala said.
According to an estimate of BJS, the number of annual customers of jewllers are around 4 crore in the country. Among them, 25 percent went to abroad for purchasing jwellers item in every year.
“If the current situation continues, after 10 years, the number of customers buying gold ornaments from abroad could go up to 40 percent,” said Dilip Agarwala who is the owner of Diamond World. On the other hand, the BJS leaders are arguing that the customs duty on gold imports on per bhori (11.664 gm) should be reduced by Tk1000. They, however, said due to various complications, it was not possible to import more than 50 kg of gold against the annual demand of around 30 metric tons. The big reason behind it is the higher customs duty and also bureaucratic complications.