NBR permits tax-free release of power plant equipment

The National Board of Revenue (NBR) has resolved complexities over releasing the power equipment from port under tax-free provision by amending the Income Tax Ordinance -1984.

Due to absence of a legal provision, many power producing companies could not release their equipment from the port since March last and were forced to stop construction of power plants.

The income tax wing of the NBR issued a Statutory Regulatory Order (SRO) on Monday, incorporating the legal provision.

A senior income tax official said import of the equipment is entitled to get exemption from Advance Income Tax (AIT), but the companies were facing difficulties to avail it due to absence of an order from the income tax wing.

The income tax ordinance allowed the exemption with reference to a SRO under customs act that the NBR scrapped with other old SROs in March last, he said.

Due to the withdrawal of the customs SROs, the customs authority at the Chattogram Port refused the power producers to allow the exemption on payment of AIT.

"A number of power plants including construction of Rampal power plant have been facing difficulties to continue with their work as the equipment remained stuck at the port for a long time," he said.

With the issuance of the latest SRO, the complexities will be resolved, the official said.

Earlier, the Summit Meghnaghat II Power Company Limited had urged the NBR to take necessary measures to resolve the problems.

In the letter, Md Reaz Uddin, Chief Executive Officer (CEO) of the company, said the customs authority is not in a position to allow AIT exemption for clearing the goods under SRO 68 that NBR issued in 2018.

The customs wing scrapped all of the previous SROs by amending fiscal benefits up to March, 2020.

The income tax official said the SRO of income tax wing regarding fiscal benefits for power producing companies had the reference of previous customs SRO that was scrapped.

In the latest SRO, the income tax wing has incorporated the reference of new SRO of customs issued on March 5, 2020 and also a special order of NBR issued on December 13, 2018.