BAPI wants changes in process loss calculation

Before realising VAT on imported life-saving drugs


FE Report | Published: April 20, 2018 16:26:04 | Updated: April 20, 2018 17:40:01


BAPI wants changes in process loss calculation

Local pharmaceutical products manufacturers on Thursday demanded changes in calculating process loss and potency compensation before realising VAT (value added tax) from the imported life-saving drugs, according to a press release.

To grab overseas markets of Bangladesh-made medicines in a more efficient and competitive way, they also requested National Board of Revenue (NBR) to take measures for removing existing contradictions between VAT law and export policy in terms of sending samples to overseas buyers.

Bangladesh Association of Pharmaceutical Industries (BAPI) placed the demands at a pre-budget meeting with NBR at its headquarters on the day.

Leaders of the apex pharmaceuticals body said the manufacturers have to mention process loss and potency compensation of the manufactured drugs in their consumption report that is required by NBR officials for calculating VAT.

The revenue men set a maximum benchmark of process loss and potency compensation - five per cent for injection and four per cent for tablet and capsule items, although process loss and potency compensation in many cases is around 30 per cent.

"The benchmark for tablets and capsules can be accepted, but it can't be accepted for injections. So, we demand to adjust it to 12 per cent or make an actual calculation of process loss after scrutiny," the BAPI statement said.

About samples of medicines, it said the VAT law allows samples worth Tk 0.1 million to be sent to global buyers, while the export policy allows products worth maximum US$ 10,000 per exporter annually (except medicine) based on FOB (free on board) price.

In case of medicines, any registered exporter, who is member of the registered association, can send products worth maximum $ 70,000 as sample, without export L/C (letter of credit), the statement said.

BAPI demanded to treat five per cent of export order and products worth Tk 1.0 million annually for product registration as samples with VAT-free facility.

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