Finance minister Abul Maal Abdul Muhith on Thursday proposed duty exemption on raw materials necessary for the manufacture of prefabricated buildings and all fire equipments to make the country’s garment factories compliant. He also proposed deduction of tax at source on cash incentive and duty waiver on some raw materials used in textile industry.‘In order to help create favourable production environment compatible with international standards, it is proposed to allow the export-oriented readymade garment sector to import without duties on certain conditions the raw materials necessary for the manufacture of prefabricated buildings,’ Muhith said while placing proposed national budget for the financial year 2014-15 in the parliament.
‘The existing duties on fire resistant door, emergency light, sprinkler system, etc are being proposed to be fully exempted in order to ensure internal security and compliance of standards by the RMG sector,’ said the finance minister.
After the Rana Plaza building collapse the western buyers mounted pressure on the garment manufacturers to relocate non-compliant units from the shared buildings for ensuring workplace safety.
Amid continuous pressure from the buyers, garment factory owners have been demanding for duty exemption on raw materials necessary for the manufacture of prefabricated buildings saying that such buildings are viable for quick relocation.
The garment manufacturers also demanded duty exemption on all products related to fire and electrical safety.
The finance minister in his budget speech also proposed to reduce the rate of deduction of tax at source on cash incentive from 5 per cent to 3 per cent for the readymade garment industry.
Earlier, the tax deduction rate at source on garments export was reduced to 0.30 per cent from 0.80 per cent and the rate for all other exports was reduced to 0.60 per cent from 0.80 per cent.
Muhith said he made the proposals to encourage the export sector and to provide more competitive edge.
For the textile sector, the finance minister proposed to reduce the duty on flex fibre, a raw material, to 5 per cent from 10 per cent and on artificial staple fibre to 3 per cent from 5 per cent.
The finance minister also said, ‘Considering the views of different trade bodies including the FBCCI, I propose to reduce deduction-rate at source from existing 5 per cent to 3 per cent on local LC valuing more than Tk 5 lakh.
‘In addition, I propose not to deduct at source on local LC of daily necessary consumer items including rice, onion, dal, turmeric, chilli, wheat, maize, flour, salt, edible oil, sugar, etc.’
-With New Age input
