Rural Development and Cooperatives Division has requested the National Board of Revenue for settling value-added tax for cooperative markets across the country at a fixed amount instead of the existing 4 per cent VAT on sale, officials of the ministry said.
They said that the division had recently made the request saying that such benefit in paying VAT will create a scope for consumers in getting essential commodities at fair price and keep the country’s kitchen market stable.
State minister for local government, rural development and cooperatives Jahangir Kabir Nanak recently wrote an official letter to the NBR chairman Ghulam Hussain on this issue, they said.
NBR officials, however, said that the secretary of the division earlier this year had requested the NBR twice for fixing VAT at a flat amount for shops at cooperative markets but the plea has been rejected.
They said that any registered shopkeepers and small businesses with an annual turnover below Tk 80 lakh were allowed to pay package VAT fixed by the revenue board.
So, there is no need to formulate separate rules for shops at cooperative markets as they also can avail the opportunity of paying package VAT, they said.
The revenue board, however, will decide on the latest request of the ministry, they said.
According to the ministry, there are 493 cooperative markets across the country and market management authorities collect essential products produced by the farmers under cooperative initiative.
In his letter, Nanak said that the government has taken an initiative to set up cooperative markets at every ward of Dhaka City Corporation, every district, upazila and other growth centres in the country.
Cooperative markets create a chain, from collecting products from farmers to selling to consumers, that reduce dominance of middle men, ensure fair price for producers and reduce the price of products at consumer end, he said.
If the revenue board does not allow VAT at fixed amount for cooperative markets, the price of products at those markets will not be less than other regular markets. Buyers will lose interest in cooperative markets and cooperative producers will be loser, Nanak claimed.
Considering the situation, Nanak proposed for fixing VAT for cooperative markets at different amount for different areas of the country.
Many consumers, however, alleged that almost all consumer items are being sold at the cooperative markets prices similar to those at other super markets.
The idea of launching the cooperative market was to sell products at lower prices than that of other markets as shopkeepers collect the products directly from producers without interference of middlemen.
NBR officials said there was no justification to give these market tax benefits as these markets kept prices of products similar to other markets.
Currently, registered small shop owners have to pay VAT at fixed amount known as package VAT ranging from Tk 12,000 to Tk 3,000 depending on their business locations with an annual turnover below Tk 80 Lakh.
As per rules, shop owners in Dhaka and Chittagong city corporations have to pay Tk 12,000, shop owners in the other city corporations have to pay Tk 9,000 while VAT for retailers in municipalities in the district headquarters is Tk 6,000 and VAT for shopkeepers in other parts of the country is Tk 3,000.
-With New Age input
