Salt import using code of caustic soda, sold in local market dodging huge revenue
Peoples Time Desk
Bangladesh is self-sufficient in salt production and the import of edible salt is currently banned in the country. But some unscrupulous traders are importing salt mentioning that it will be used in production of caustic soda. Later, the imported salt is being sold in the country's market causing huge revenue loss of the government every year.
Experts and affected people said price of salt in the market is higher than caustic soda. The importing cost of salt is much higher than caustic soda. As a result, many people are importing salt using HS code of caustic soda.
According to National Board of Revenue (NBR), there are 5 percent advance income tax and 5 percent customs duty on caustic soda at the import stage. However, the importers have to pay 93 percent duty and tax to import one kilogram of edible salt and 25 percent for industrial salt.
According to the NBR, Samuda Chemical Complex Limited, KEN Park Bangladesh, SMDS Bangladesh, STL Bangladesh and TCCL Bangladesh, and MAEC Group BD etc are the top importers of caustic soda in the country.
Sources at the Ministry of Industry said Bangladesh produces 3.5 lakh tonnes of caustic soda against the demand of 4 lakh tonnes every year. But about four lakh tonnes of caustic soda is being imported every year.
Meanwhile, the demand for salt in the country is about 17 lakh tonnes per year, almost all of which is produced in Bangladesh. According to Commerce and Industry ministries, there is a shortage of 2-2.5 lakh tonnes of salt in the country. But traders and salt mill owners claimed that there is a shortage of 10 lakh tonnes of salt in the country. Giving misinformation, an unscrupulous business group is importing salt, very often in the name of caustic soda.
Finance Minister AHM Mustafa Kamal in his budget speech for the current fiscal year 2021-22, said, “Although the import of edible salt (sodium chloride HM code 2501.00.10) has been banned in the country for a long time, there is an opportunity to import industrial salt (sodium sulphate / disodium sulphate). As the price of industrial salt differs from that of edible salt, there is a tendency to import edible salt through misinformation. There is an allegation of marketing industrial salt mixing with edible salt - a combination harmful to public health. This is affecting the marginal salt farmers and salt mills of the country. I am proposing to increase the existing tariff on import of industrial salt (sodium sulphate / disodium sulphate) in line with the recommendations of the Ministry of Industries to protect salt farmers, ensure proper use of imported industrial salt and reduce public health risks.”
The tariff has been increased from 15 per cent to 25 per cent in the day when the budget was passed in parliament and it is currently in force. Despite this, there are allegations that an unscrupulous group is importing salt, only to sell it in the market.
It is known that caustic soda has multiple uses and the chemical is being used in readymade garments, paper industry, food processing, gold refining and as a disinfectant.
At present, about four lakh tons of caustic soda is being produced annually in the country and a dozen of companies are involved in the production of it.
There is 15 percent VAT on caustic soda at the sales stage and 5 percent AIT and customs duty. In addition, there is another 5 percent duty at the factory level. The total VAT and tax on production, import, sale and marketing is 25 percent, which is less than salt.
There are at least seven types of caustic soda used in a variety of purposes. The country produces seven types of chemicals including caustic soda, bleaching fine and bleaching powder. The HS codes against which caustic soda being imported are – 28151100 and 28151200.
Mazakat Harun Manik, president of Bangladesh Chemical Importers and Merchants Association, said there are some companies which are producing caustic soda. If anyone imports salt under the guise of caustic soda, he is committing crime. The government should take appropriate action against him.
Meanwhile, the Cox's Bazar Salt Farmers and Traders Sangram Parishad has sought the intervention of the Prime Minister to stop the conspiracy of unscrupulous traders' syndicate importing foreign salt, despite having a surplus salt produced in the country.
In a press conference on October 9 last year, Advocate Shahid Ullah, general secretary of the organisation, said there is no shortage of salt in the country but a syndicate is again trying to import foreign salt by giving wrong information to the government. The conspiracy against the domestic salt industry should be stopped by any means.