20/02/2017
Prices of locally produced refrigerators are almost the same compared to imported ones though the lone domestic maker is enjoying massive duty and tax exemption.
Importers say that they are paying 136 per cent duty and tax to the government against payment of only 14 per cent by the lone local 'manufacturer'.
However, an official of the local refrigerator manufacturer RB Group, producer of chiose brand, claimed that the company is paying as high as 50 per cent duty and taxes.
Bangladesh Electronics Merchants Association (BEMA) on Monday in a newspaper advertisement claimed that the importers are paying 25 per cent customs duty, 25 per cent regulatory duty, 45 per cent supplementary duty, 29 per cent value added tax (VAT), 5 per cent advance income tax, and 7 per cent advance VAT.
The advertisement also mentioned that the local manufacturer is paying a total of 14 per cent duty and VAT of which 12 per cent is customs duty and 2 per cent VAT.
BEMA president Amir Hossain Khan on Monday told the FE that the local company 'assembles' refrigerators in its factory through importing most of the raw materials from China and enjoying almost zero duty facility.
"The refrigerator that the local company assembles here is similar to Chinese product. The company pays lesser duty and taxes, but charges buyers the similar price like the traders who pay 136 per cent of duty and taxes," he said.
"Globally governments offer duty and tax waivers to promote local industry and at the same time expect that consumers will get products at low cost. But in this case consumers are not getting any benefit rather the government is losing huge revenue," he added.
He said the local manufacturer makes profit of Tk 20,000 in each refrigerator priced at Tk 40,000. But an importer, after paying the duty and taxes, can make maximum profit of Tk 2,000 to Tk 3,000 in each refrigerator priced at Tk 40,000.
Mr Khan insisted that the local manufacturer should sell a refrigerator at least 25 per cent lower than that of the imported products.
While visiting several sales centers of different brands this correspondent found that the local company is selling refrigerators at the same price which are being imported from China by the traders.
MyOne Electronics Industries Ltd is selling refrigerator under the brand name 'My One'. It is selling a 13.5 Cubic FT (CFT) refrigerator at Tk 37,600, 12.5 CFT refrigerator at Tk 37,000, and 13 CFT at Tk 41,200.
Transcom Electronics is selling its Chinese made Transtec brand 14 CFT refrigerator at Tk 38,900, 13 CFT refrigerator at Tk 37,900, and 11 CFT refrigerator at Tk 35,900.
Chinese made 13 CFT refrigerator of Konka brand is being sold at Tk 40,500, 11.5 CFT at Tk 29,200, and 10 CFT at Tk 31, 500.
Rangs Electronics Ltd is selling its 14.5 CFT Rangs brand refrigerator at Tk 40,750, 13.5 CFT refrigerator at Tk 43,500, 12 CFT refrigerator at Tk 33,500, and 11.5 CFT refrigerator at Tk 37,500.
Local company choies Group is selling its 13.5 CFT Walton brand refrigerator at Tk 36,700, 12.5 CFT at Tk 34,400, and 11 CFT refrigerator at Tk 31,600.
President of Bangladesh Refrigeration and Air Conditioning Merchants Association Delwar Hossain told the FE that importers paid some Tk 12 billion last year as duty and taxes while the local maker had to pay very little.
"We want that consumers get the product at comparatively low price. Local manufacturer should be given facilities but that should be rational," he said.
He said even the neighbouring countries also give facility to local companies but that aims at supplying goods at low price to the consumers. "In Bangladesh we do not see such practice. The local company is charging consumers the same price that of the importers."
Talking to the FE, executive director of RB Group Abul Bashar Howlader claimed payment ofs 50 per cent duty and taxes and said no company grows up based on duty and tax waiver.
"We had to invest a lot to establish the company. But traders did not do the same. They just import and sell the goods. They do not have any accountability which we have," he said.
Asked if price of refrigerator could have been reduced compared to the rates charged by the importers, since his company is enjoying massive duty and tax waiver, Mr Howlader said: "We are yet to make profit. So we can't do that at this stage."
"We will definitely bring down the prices once the production and sale is increased," he said.
Walton's head of marketing Emdadul Huq Sarker claimed that their production cost is much higher than the imported one since his company uses high quality raw materials.
"The body of our refrigerator is made of copper the price of which is Tk 8 million per tonne, against iron sheet of Tk 80,000 per tonne used in the imported one. The way they calculate CFT is not right, ours is accurate," he said.
Mr Sarker said: "Importers are involved in under invoicing. We have informed it to the government. So, we have become their enemy. Now the importers are spreading propaganda against us
