5th April 2021

The National Board of Revenue (NBR) has decided to reduce VAT on Liquefied Petroleum Gas (LPG) to 7.0 per cent from the existing 15 per cent to make its prices affordable to the end-users.


There will be 5.0 per cent VAT at production or supply stage and 2.0 per cent VAT at business stage, once the decision is implemented.


The NBR's VAT Wing recently sent a letter in this regard to the Bangladesh Energy Regulatory Commission (BERC).


BERC Member (Gas) Maqbul-e-Elahi Chowdhury said the consumers would get the benefit of 8.0 per cent tax reduction, but local LPG prices vary in line with fluctuation in international prices.


Currently, there is 5.0 per cent VAT at retail stage, 5.0 per cent VAT at business stage, and another 5.0 per cent VAT at production or supply stage of the fuel.


The VAT officials said they sent the letter to the BERC and requested it to fix the LPG prices on the basis of the reduced VAT rate.


Officials said the VAT rate on LPG had been cut following recommendations of the BERC to facilitate distribution of the fuel among the consumers at reasonable prices.


The NBR subsequently decided to exempt VAT at consumer end, and reduced tax at business stage.


As per the High Court (HC) order, the commission would have to re-fix LPG prices at consumer level by this month.


The BERC member said the commission would try to re-fix the prices by this month, but it was allowed to take time until mid-April, according to the law.

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