The National Board of Revenue has rejected a plea of Chevron Bangladesh Limited seeking exemption from paying tax at source on import of machinery, mostly spare parts, for gas exploration and development activities, officials said on Monday. In a recent meeting, the revenue board made the decision as according to Income Tax Ordinance-1984 there is no scope for providing such exemption, they said.
International Oil Companies including Chevron Bangladesh are enjoying a 90 days deferred payment facility for paying tax at source on import of machinery used in oil and gas exploration and development purposes.
NBR officials said the deferred payment facility was provided considering the national interest though income tax ordinance did not allow such facility to any importers.
Recently, Chevron Bangladesh and Petrobangla made an appeal to the NBR for allowing exemption to Chevron from paying tax at source saying that Petrobangla, which is, according to Production Sharing Contract, responsible to pay the tax on behalf of the company often fails to pay the tax in time which caused delay in project implementation and increased project cost of the company.
In the meeting, Petrobangla officials said Chevron imported huge quantities of machinery and it was difficult for
the state-run petroleum agency to pay the huge amount of tax in time that caused complexities for the multinational oil company in implementing their projects.
Importers enjoy exemption from paying tax for all types of capital machinery at source but tax at
source is applicable on import of other machinery
and spare parts, the officials said.
International oil companies have to pay tax as those are not tax-exempted bodies, they said.
According to the Production Sharing Contract, Petrobangla is liable to pay taxes on behalf of Chevron to the NBR. So Petrobangla will pay the tax in quarterly instalments, the NBR decided.
It also decided to instruct its customs houses for releasing goods imported by the international oil companies within 24 hours of submission of all necessary documents.
-With New Age input
