The National Board of Revenue (NBR) has exempted a fuel import terminal project from paying VAT and duty on materials and services required for construction of the facility.
It issued a special order on December 17 last, signed by NBR Chairman Md Nojibur Rahman, amid concerns expressed by the ministry of power, energy and mineral resources that the implementation of the liquefied natural gas (LNG) import terminal project is being delayed.
Summit LNG Terminal Co (Pvt) Limited will construct the Floating Storage Re-gasification Unit (FSRU) at Maheshkhali Island in Cox's Bazar. The terminal will have the capacity to handle 500 million cubic feet of gas per day (mcfd).
The company will enjoy exemption from payment of Value Added Tax (VAT), Advance Trade VAT (ATV) and Supplementary Duty (SD) on products and services for setting up the FSRU and its activation.
However, products and services that would be imported for personal use will not be entitled to the exemption, according to the order.
The payable VAT and SD by the FSRU will also be exempted while the ATV will be exempted from all the imported products of FSRU that had been exempted from the customs duty earlier.
The floating LNG terminal would be constructed on the Build, Own, Operate and Transfer (BOOT) basis as per an implementation agreement (IA) between the energy and mineral resources division and the Summit LNG Terminal Company.
As per the 'Speedy Supply of Power and Energy (Special Provision) Act 2010', the government is facilitating construction of the terminal for importing LNG.
The government is trying to complete all relevant activities in setting up the FSRUs for facilitating import of the fuel from the beginning of the next year.
Earlier, the NBR had exempted Excelerate Energy Bangladesh, a subsidiary of the US-based Excelerate Energy, from the taxes to facilitate construction of another LNG terminal at Moheshkhali.
To meet the growing demand for the energy, the government in 2010 decided to import LNG as the country's own natural gas reserves were depleting fast and no major discovery has been made for long.
At present, the country is struggling with a natural gas supply shortage of around 700 mcfd.
