02/05/2013

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BANGLADESH: NBR sets tariff value for imported tyres

The tariff value is the base price on which the customs duty is determined. Earlier, customs officials determined duty based on the assessable value certified by pre-shipment inspection
firms.

The tariff value became effective from 29 January in line with a notification of the revenue administration.

The NBR, however, did not impose any tariff value for tyres of bus and trucks amid opposition from bus and truck owners.

"It will help reduce under-invoicing of imported tyres. From now, no importers can quote prices below the tariff value," an NBR official said, asking not to be named.

"We have taken the decision based on opinions of all stakeholders," the official said.

The move came amid objections from local tyre manufacturers that they face an unequal price competition with imported tyres because of under-invoicing by a section of importers.

Under the new tariff valuation method, the value for each kilogram of imported tyres of motor cars, microbuses and pickups from Indonesia, China and Vietnam has been set at $4.
The values for imported motorcycle tyres and three-wheeler tyres are $3.75 and $3.50.

For importing tyres of motor cars, motorcycles and three-wheelers from Thailand, Pakistan, Nepal, Sri Lanka and Malaysia, the value has been set at $4.25, $3.75 and $4 each kg, according to the notification.

The tariff value for tyre imports from Korea, Japan, Taiwan and other countries has also been fixed.

"We hope under-invoicing will come down due to the tariff value. It will increase prices of imported tyres and bring parity," said Mamunur Rahman, commercial manager of Apex Husain Group, a local tyre maker.

Rahman said local tyre makers were in troubles to compete with imported tyres because importers charge prices below the prices of locally made tyres.

At present, three or four local firms make tyres, mainly for three-wheelers, microbuses, pickups and minibuses to cater to the growing domestic market.

Bangladesh needs around 1 million pieces of three-wheeler tyres a year. Of the requirement, local firms make 0.5 million, Rahman said. Currently, tyre importers have to pay a total of 61 percent as duty and taxes.

Mokhlesur Rahman, who heads the sales and marketing team of tyre at Rahimafrooz, said they are yet to calculate whether the prices of tyres will increase following the move.

Source: "The Daily Star", Dhaka; 5 Feb 2013

(Syed Rashid Ali, Karachi, Pakistan)

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