FBCCI for 15pc VAT waiver on edible oil import

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) yesterday demanded that the government withdraw a 15 per cent VAT on edible oil import to rein in skyrocketing prices.

The FBCCI also suggested that the government enable bonded warehouse facility on the import of the widely consumed cooking oil, albeit for domestic consumption, to prevent unscrupulous businesspeople from manipulating prices.

A section of dishonest businesspeople have been selling edible oil at prices much higher than the government-fixed rate ahead of Ramadan.

Some have turned so desperate that they are collecting bottled edible oil to sell it in the loose form, which, in the absence of price labels, are now fetching higher prices amidst an artificial crisis.

The bottled oil has the price printed in the labels, for which those cannot be sold for higher than the government-fixed rates. The brisk business of collecting loose oil from their bottled form is putting budgets of low-income people under pressure.

The request for the VAT withdrawal came from FBCCI President Md Jashim Uddin at a discussion organised by the federation on the current market situation of edible oil.

He also requested businesspeople not to chase after hefty profits at the expense of the people.

The FBCCI will also form and send out a team soon to monitor market prices of basic commodities and curtail malpractices, Uddin said.

The whole business community cannot take the blame for the dishonesty of a small group of unscrupulous traders, he added.

He strongly recommended edible oil sellers to stick to government-fixed rates and not hoard the cooking oil to do brisk business.

If anybody is found guilty of any malpractice in edible oil sales, the FBCCI might not lend support as the government is ready to take stern action against them, he said.

The businesspeople should help the government in the upcoming Ramadan by keeping market prices of basic commodities stable, he also said.

Importers, millers, refiners, wholesalers and leaders of different trade bodies participated in the discussion.

Biswajit Saha, director for corporate and regulatory affairs of City Group, said the current discussion might indicate that there was a crisis of edible oil in Bangladesh but in reality that was not true.

His said his company was supplying between 2,000 and 2,500 tonnes of cooking oil to distributors every day.

He apprehended that some people might be hoarding cooking oil in fear of further price hikes ahead of Ramadan.

Contradicting Saha's statement, Golam Mawla, president of Wholesale Edible Oil Businessmen Association, said the wholesalers have to wait for five days to six days to avail the supply of oil from the factories.

Every day the wholesalers have to pay Tk 3,000 as demurrage to each truck awaiting the oil supply, he said.

If any truck ends up waiting for six days, the wholesalers have to pay Tk 18,000 as the demurrage, which inevitably has an impact on prices of edible oil at the retail level, Mawla said.

Md Shafiul Ather Taslim, director of TK Group's finance and operations, said currently the government receives between Tk 25 and Tk 26 as tax on every litre of edible oil, which was fixed through the national budget last year.

But by this time, prices of edible oil have gone up in the international markets which had a ripple effect on the national markets, he said.

The government may suspend the tax collection for the time being to prevent the price from escalating in the markets, he added.

The FBCCI will again sit in a discussion on the edible oil issue on March 12 to know the latest situation, said Uddin.