All types of value added tax (including advance tax) levied at the import stage shall be exempted on import of capital equipment of ship reprocessing establishments. Conditionally exempted from VAT with a view to upgrading ship recycling yards to green shipyards.

This information was informed in an order signed by National Board of Revenue (NBR) First Secretary (Musak Policy) Mashiur Rahman on Wednesday (December 11). This order will be effective immediately. This VAT will remain in force till June 26, 2025.

The government will upgrade all ship recycling yards to green ship recycling yards by June 26, 2025, the order said. Otherwise no ship can come to Bangladesh for reprocessing after that time. For this reason all forms of value added tax (including advance tax) are exempted as per sub-section (3) of section 126 of the Value Added Tax and Supplementary Duties Act, 2012 (Act No. 47 of 2012).

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It further states that the imported capital equipment will be required and used only for the development of ship breaking and recycling yards. In this regard, a certificate from an officer not below the rank of Deputy Secretary of the Ministry of Industries must be submitted to the Customs authorities at the time of clearance. Capital equipment imported at subsidized rates is to be used only in ship breaking and recycling yards. Cannot be sold or transferred before a minimum of five years. If the imported capital equipment is sold or transferred before the expiry of five years, the concessional benefit will be cancelled. In that case, all value added tax (including advance tax) levied at the import stage will be collected.

The order said that the capital equipment imported at subsidized rates should be used only in ship breaking and recycling yards and not sold or transferred before a minimum of five years will be monitored by the concerned value added tax officer and the concerned revenue officer. An undertaking under non-judicial stamp of three hundred rupees to the effect that the imported capital equipment will not be sold or transferred for a minimum period of five years shall be filed by the importer with the concerned customs authority at the time of customs clearance.