Transit Facility-Govt to take fee, not duty

Finance Minister AMA Muhith yesterday said the government is going to formulate new rules to fix fees for giving transit facility to India for transporting goods through Bangladesh.

“They will use our facilities to transport their goods. Our infrastructure will be used and that involves some costs for the government. So we’ll have to take something; it may be called fee or anything,” he told journalists after a meeting with the visiting mission chief of IMF at his ministry.

Muhith said the existing transit rules of the National Board of Revenue (NBR) will be amended and the amount of fees will be refixed.

The minister added a transit facility already exists through waterways and the country receives fees of around Tk 5 crore annually. But there has been no such facility for road and rail transport. So new set of rules will be formulated for all the transit routes.

In June the NBR issued a set of rules on transit and transhipment fees during the announcement of the national budget. However, the Indian government has demanded waiver after Bangladesh applied it to the existing waterway transit.

The minister said the transit fees imposed by the NBR have been kept in abeyance. Duty couldn’t be charged on India for transportation of its goods through Bangladesh as we have given them transit facility, he added.

He said as per the international rules no duty can be imposed for giving transit but fees can be charged.

On the journalists’ query as to whether the NBR circular was an outcome of misunderstanding, he said a bit of misunderstanding was there.

However, Muhith said though duty cannot be imposed for transit it can be charged for giving transhipment facilities. Bangladesh already has a rule in this regard.

The government had no ready statistics as to how much revenue it would earn, but there are several data available with other organisations. The government is going to hold a seminar soon in this regard.

The finance minister overruled the opposition’s reservations about giving transit to India and said Bangladesh is a geographically transit country.

International Monetary Fund Mission Chief David Cowen led a six-member team at a meeting with Muhith. Prime Minister’s Economic Affairs Adviser Mashiur Rahman, Bangladesh Bank Governor Atiur Rahman and Finance Secretary Mohammad Tareq were present at the meeting.

Muhith said they discussed with the IMF delegation the extended credit facility and they (IMF) are likely to give $1 billion.

He added it is normally given for balance of payment support. He said now Bangladesh’s import has increased requiring money for balance of payment support.

Asked whether the issue of political appointment of directors in the state-owned-banks (SOBs) came up for discussion during the talks, the minister said those were on the table but were non-issues.

He said the major issues were revenue mobilisation, power generation and budget cost of subsidy.

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Posted by on Nov 2 2010. Filed under Bangladesh. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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