Metro fare to remain unchanged for now as no decision on VAT exemption yet

The metrorail fare will not be increased from tomorrow as the Dhaka Mass Transit Company Limited was yet to receive a response from the National Board of Revenue (NBR) regarding the VAT exemption.

However, an NBR official told The Business Standard that VAT will likely be imposed from tomorrow as no other special order on extension was issued from the revenue authorities.

The VAT exemption on metrorail tickets, granted by the NBR on 28 December 2022, expired today (30 June).

DMTCL Managing Director MAN Siddique said, “I need a clear reply from the NBR about the VAT imposition. We need to know if they will continue the VAT exemption or not.

“We have sent a letter requesting clarification but have yet to receive a response. Once we get it, we will make a decision.”

Acknowledging that the revenue authorities were busy with the national budget, Siddique said, “As the budget was passed today, they might inform us about their stance later like last year.”

However, an official from DMTCL confirmed that they are preparing to implement higher fares if VAT is imposed.

“Our consultants have already started working on developing the system and software to implement increased fares if VAT is imposed. But we still believe that the government will not impose VAT on this public service,” the official said.

On the issue, NBR First Secretary of VAT Policy Mohammad Hasmat Ali today said, “Since no special order has been issued by the NBR, the previous decision stands, and VAT will likely be imposed on the metrorail tickets from tomorrow.”

Earlier, despite DMTCL’s request to extend the exemption, the NBR decided to cancel it after June.

On 4 April, the NBR informed DMTCL through a letter that VAT would be payable on metrorail services and tickets from July. In response, various organisations, including DMTCL, requested  to exempt the VAT.

In May, at an event titled “Branding Seminar on Dhaka Metrorail”, Road Transport and Bridges Minister Obaidul Quader said he has requested Prime Minister Sheikh Hasina to reconsider the decision to impose 15% VAT on the metrorail.

He said, “In which country is there a 15% VAT on metrorail? There is no VAT on metrorail in India. So why should we have 15% VAT?”