Bangladesh

Import of painted bike components allowed again

The revenue authority has reinstated the opportunity for motorcycle assemblers to import painted completely knocked-down components of two-wheelers.

The move from the National Board of Revenue comes nearly four months after it stopped providing the benefit of importing painted components, termed completely knocked-down (CKD), of motorcycles since June.

In its latest decision posted on its website early this week, the NBR extended the benefit for importing painted components of motorcycles in CKD form until June 30 next year.

"We have reintroduced the benefit amid pleas from the industry," said a senior official of the NBR on condition of anonymity.

The reinstatement of the scope created mixed reactions among industry operators, who sold 4.5 lakh units last fiscal year.

Companies with a focus on assembling hailed the move. However, firms that have to manufacture motorcycles by adding some locally-made components termed the NBR's latest decision a reflection of weakness in policymaking.

"The will be beneficial for us. Some factories had to close after the revenue authority discontinued the scope of importing painted components.  They are likely to reopen," said Matiur Rahman, president of the Bangladesh Motorcycle Assemblers and Manufacturers Association.

He said all the companies, be assemblers or manufacturers, would have to import CKD components of bikes.

"We need an extension of the scope to test new models of bikes and to see customers' response to decide on the models that we will start making from next year," said Rahman, also chairman of the Uttara Group of Companies.

Until 2015, motorcycle assemblers could import painted knocked-down components of motorcycles.

In April 2015, the Motorcycle Manufacturers & Exporters Association of Bangladesh (MMEAB) demanded amendments to definitions of CKD motorcycles, citing that the difference that painted CKD bikes are allowed to be imported, although vehicles can be imported in CKD form sans the painting.

Later, the government decided to stop providing the scope to import bikes in CKD form. However, the revenue authority extended the scope until June this year amid demands from assemblers.

The NBR discontinued the benefit along with withdrawing the value-added tax (VAT) exemption benefit for bike manufacturers in June this year.

"It would have been proper justice if the NBR had reinstated the VAT exemption benefit for firms which are really making motorcycles," said MMEAB President Hafizur Rahman Khan.

Khan, also chairman of Runner Automobiles, a pioneer in motorcycle making, said the latest decision reflects weakness in policymaking.

Already three categories of manufacturers/assemblers have been created without clear policy guidelines on motorcycle components import with or without paint, he said.

Subrata Ranjan Das, executive director of ACI Motors, said the policy should be updated in line with advancements of technology used in motorcycles.

Bangladesh's bike market began to expand fast from the fiscal year 2016-17 when the government slashed the supplementary duty by 25 percentage points to 20 per cent on the import of the two-wheelers' components to encourage domestic manufacturing.

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