AC-fridge prices may increase


Finance Minister Abul Hasan Mahmud Ali has proposed imposition of seven and a half percent Value Added Tax (MUSAC) on the production of air-conditioning (AC) appliances, refrigerators and freezers. Besides, it has been recommended to withdraw subsidized rate of import duty on products used in AC and refrigerator production. If this proposal and recommendation is passed, the price of AC and refrigerator will increase.

The Finance Minister presented the budget for the fiscal year 2024-25 in the National Parliament on Thursday (June 6).

In the proposed budget, the Finance Minister said, in the case of air-conditioner production, instead of zero percent at the local production stage, the existing musast (including advance tax) and supplementary duties (where applicable) exemption from existing musats (including advance tax) and supplementary duties (if applicable) in the case of import and local purchase of materials and spare parts required for the production of the said product will be imposed. Extension till June 30 and extension of existing exemption facility in case of compressor manufacturing till June 30, 2025.

In the budget statement, it is said that in the case of production of refrigerators and freezers, instead of five percent, the amount of local production tax will be imposed at 7.5 percent, and the existing import tax (including advance tax) and supplementary duty (where applicable) on the import and local purchase of necessary materials and spare parts used in the production of the said product. ) is proposing to extend the period of exemption till June 30, 2025.

In the budget speech, the finance minister said that air conditioner manufacturing companies can import compressors at subsidized rates as per the existing notification. Recommend withdrawal of subsidized rates on compressors as air conditioners are not used by low income people. Apart from this, currently the compressors required for the production of refrigerators are produced in the country, so as to encourage the backward linkage related organizations, I recommend the withdrawal of the existing subsidized rate on the import of compressors used in the refrigerator industry.

It is said in the budget speech, in the interest of considering the ability to pay revenue, it is recommended to increase the import duty of various types of steel sheets from 5 percent to 10 percent as mentioned in the notification regarding the air conditioner manufacturing company. Besides, in the same notification, I propose to increase the import duty of those products to 15 percent.

Abul Hasan Mahmud Ali proposed to levy a minimum price on the import of compressors used in refrigerators and air conditioners in order to collect proper revenue. He said, currently one percent import duty is applicable on the import of air conditioners with a capacity of more than 200,000 BTUs. By increasing the said limit, one percent import duty can be levied on the import of air conditioners with a capacity of more than three lakh BTU.

MMAR/MS