International Tender In Bangladesh
Local cos to get VAT exemption for goods supply, services
The National Board of Revenue has granted exemption of value-added tax to local companies participating in international tenders for supplying goods and services inside the country to increase competitiveness of local bidding firms and save foreign currency, officials said.
The revenue board has recently amended the Value-Added Tax Rules-1991 and included a provision in the rules in this regard to facilitate the local suppliers through ensuring a level-playing field.
According to the amendment, goods and services supplied to the country in which prices to be paid in foreign currency under international tenders would be considered as export.
As a result, any VAT registered company in the country will get refund of the amount paid as VAT for supplying goods and services.
According to NBR officials, local suppliers face uneven competition in participating in international tenders as their quotation price becomes higher than international participants due to VAT imposition at supply stage.
On the other hand, international participants need not pay VAT at supply stage as they provide the goods and services to the tender inviting authorities at port.
Goods and services recipients pay VAT and other taxes to the revenue board.
‘The existing provision creates uneven competition for local bidding companies and most of the time they do not get work order due to higher quotation price they mentioned in tender document,’ a senior NBR official told New Age on Wednesday.
He said that huge amount of foreign currency went out abroad every year as prices of goods and services supplied by the international participants.
Now, local companies will achieve competitiveness with international participants in international tenders that will pave the way for them in getting more work orders under such tenders, he said.
Bangladesh will save foreign currency in this way, he pointed out.
It will also help industrialisation in the country as the supply of goods and services from local sources will increase, he added.
In the country, international tenders are mostly invited by the government organisations for procuring machinery and other goods which are not produced or available in local market for implementation of large projects.
Private firms are also invited to participate in international tenders for procuring machinery to implement large projects such as power and infrastructure sectors.
In the existing rules, participants, both local and foreign companies, in international tenders for implementing projects under international loans or grants are enjoying VAT exemption in accordance with the international and bilateral treaty.
-With New Age input
