Committee formed over VAT imposition on metro rail fares

A committee has been formed to determine the imposition of VAT on metro rail tickets.

Passenger fares may include VAT from 21 July unless a new decision is made by the National Board of Revenue (NBR).

The committee was formed at a meeting held at the meeting room of Ministry of Road Transport and Bridges today (4 July).

Representatives of the National Board of Revenue (NBR), Dhaka Mass Transit Company Limited (DMTCL), and ministry authorities attended the meeting. 

Various issues related to VAT were discussed in the meeting, meeting sources said.

When asked about the discussion of the meeting, DMTCL Managing Director MAN Siddique told TBS, “The ministry will address this matter. I am not authorised to speak on it.”

However, according to meeting sources, the DMTCL authorities have requested a VAT exemption as a new company and public transport provider. They urged the NBR to reduce VAT from 15% to 5% if a full exemption is not possible.

The NBR stated that they do not have the VAT exemption authority. They will implement any directive from the Prime Minister’s Office or the Finance Ministry, sources said.

No decision has been taken yet about increasing the fares. However, a 15% VAT has been imposed from 1 July as the VAT exemption on metro rail tickets, granted by the NBR on 28 December 2022, expired on 30 June. 

The metro rail authorities will have to pay VAT from July. However, a decision has not yet been made on whether the VAT will be adjusted in the passenger fare. 

The committee has been formed to address the issue.