DHAKA: The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) on Monday urged India to do away with certain taxes such as the value added tax imposed on duty-free garment exports to facilitate greater bilateral and regional trade.
Under the South Asian Free Trade Area agreement (SAFTA), India and Bangladesh had in 2007 inked a MoU under which Bangladesh is to export each year eight million garments to India duty-free.
“Although the import duty is nil, there are some levies such as education tax and VAT which are being imposed. This is impeding exports under the scheme,” FBCCI President, Mr Annisul Huq said. Under the MOU, Bangladesh started sending consignments from J anuary last year.
Speaking on the sidelines of a conference on India- Bangladesh Economic Relations, organised by FICCI, Mr Huq said, “We have been given 8 million pieces of duty-free garments but although the customs duty is nil, there are almost 18 per cent taxes. So th e benefit of the scheme is not being fully utilised.”
Given these issues, Mr Huq said, a mere 10 per cent of the total volumes were currently being met
Source : Business Line