A Japanese company claims Bangladesh customs has charged Tk 292 million in duty-taxes on its building-material imports by mistake and has moved for refund of the money.
Officials say Japan's Dhaka mission has taken up the matter and approached the revenue board and higher authorities for return of the amount.
Tax officials, however, say the firm is not entitled to such a fund refund.
The company, YKK Bangladesh Pte Ltd, paid the import tariffs charged by Dhaka airport and Chittagong customs authority at the time of import of the materials.
Japanese Ambassador in Bangladesh Ito Naoki raised the matter in a recent letter to the National Board of Revenue (NBR) chairman, Abu Hena Md Rahmatul Muneem. Copies of the letter have been sent to the principal secretary to the Prime Minister, the finance minister, the executive chairman of BEPZA, the commissioner of Dhaka and Chattogram bond commissinerate, the managing director of YKK Bangladesh and the country representative of JETRO.
He also visited the NBR chief in person to resolve the issue, urging refund of the taxes.
"Between 2017 and 2019, import tariff has been mistakenly imposed on YKK Bangladesh by the customs, inconsistence with SRO 237 issued by BEPZA clearly stating that companies in EPZ can import building materials without paying duty," the envoy wrote in the letter.
It should be noted that BEPZA, which is responsible for operation of companies in EPZ, has known the issue from the beginning, the letter reads.
He said the amount of paid duty-taxes is huge enough for the Japanese Zipper manufacturer to consider if it keeps investing in Bangladesh.
The Japanese envoy said the company continued discussion with customs every month to resolve the issue and apprised the BEPZA on this issue through sending letters on August 9 and May 2, 2017 respectively.
However, it had not claimed refund directly from customs within six months as per customs rules.
On June 13, 2019, the NBR in a letter to the Chattogram customs house said: '105 out of 111 items are considered building materials and duty- free, and concerned port commissioner airport/Ctg port) can consider YKK's refund subject to the Customs Act 1969, section 33'.
Mr Ito Naoki said all items must enjoy duty-free facility as building materials can be imported in EPZ tax-free as per SRO 237.
He urged refund of the import tariffs to YKK that had managed to import items without paying any duty until April 2017 and from July 2018 onwards.
"It is clear that import tariff during the period of time is a mistake by the customs," he writes.
The diplomat thinks solving this issue would be iconic to represent improving investment climate in Bangladesh which will lead to increased FDI for the future.
Talking to the FE, a senior customs official said the refund is not applicable to the Japanese company as it was under a previous SRO that was scrapped by the time it imported the products.
The NBR chief has explained the matter to the Japanese ambassador that there is little possibility to refund the paid tax, he added.
Addressing the Japanese investor's plea, the NBR had formed a three-member committee to scrutinize whether the company is eligible to get refund of the claimed duty taxes.
On the basis of a report of the committee, the NBR found YKK not entitled to the claimed refund.
Responding to FE's query, Yamaya Hiroyuki, minister, deputy head of mission, the Embassy of Japan, said the Japanese embassy is in a position to promote bilateral ties between two nations and, in this regards, to encourage their investment into Bangladesh as well.
"In this context, we discuss many issues with our counterparts in order to encourage foreign direct investment into the country," he said.
"It does not mean that we intend to challenge legal framework of Bangladesh, but to convince new potential investors to believe Bangladeshi market is open, fair, predictable, and full of opportunities," he added.
doulot_akter@yahoo.com