Local entrepreneurs demand VAT exemption on LED lights

Milton Ahmed: Local entrepreneurs have demanded the exemption of VAT on extensive electricity saving LED (light-emitting diode) lights industry.

They opined that the move will protect local investment, boost the industrial sector of the country, reduce import cost and create employments.

Sources said, LED lights consume 50 to 60 percent less electricity than energy saving or CFL (compact florescent light) bulbs. The LED bulbs, lights, panel lights, tube lights etc. are being used on a large scale on city streets, offices, educational and other establishments along with homes and industrial factories. The major portion of the demand of LED lights is met by importing them.

However, several Bangladeshi entrepreneurs came forward to cut the import tendency. They are establishing heavy production units including LED lights factory inside the country creating scopes for the expansion of new and potential industries. For which the Bangladeshi entrepreneurs called upon the concerned authorities to exempt all existing VAT on LED light industry.

The proposed Bangladesh Electrical Electronics and Home Appliances Manufacturers and Exporters Associations (BEEAMEA) has recently presented written recommendations to the National Board of Revenue (NBR) on this regard. The recommendations include the demand for exemption of all existing VAT on LED industry.

Sources at BEEMEA said, emphasizes were given on the use of energy efficient equipment to curb the deficit on electricity supply nearly a decade ago. Following the move, energy saving or CFL bulbs were released on the market.

The government went for free distribution of energy saving bulbs in retail level across the country. The NBR also exempted all VAT on import and production of CFL bulbs issuing a gazette notification in 2010. However, the exemption of VAT was not applied on import and production of LED bulbs for which the local entrepreneurs are discouraged to go for huge investment in setting up LED lights production units in the country. As a result, a vast potential industry is at risk of going to be nipped in the bud.

Sahabuddin Sabuj, General Secretary of BEEMEA, said, LED lights are more energy efficient than CFL bulbs. Now it is a logical demand of the time to declare LED lights productions and raw material import duty free. Citing a research of a non-government organization, he said the use of LED bulbs in Dhaka city alone can save 600 MW electricity every day adding that the CFL bulbs are harmful for environment.

The Ministry of Power, Energy & Mineral Resources has recently set several targets among which the major one is to save 15 percent energy within 2021 and 20 percent within 2030. Several priority basis initiatives have been taken to achieve the targets and the foremost is to transform the street lights into LED bulbs.

It is learnt that several entrepreneurs have taken initiatives to set up full-fledge LED lights production units in the country. They made huge investment in this sector which include purchasing land, infrastructure building, supply of some raw materials of LED lights in local level, setting up machineries, quality control, establishing research and development department etc. However, the local made LED lights are lagging behind in the race with CFL bulbs for the lack of suitable VAT policy. As a result, the vast investment on full-fledge LED lights industry is facing huge risk.

The entrepreneurs said that the LED lights has secured its place ahead of CFL bulbs as more energy efficient bulbs across the world. Specially, there is no other way than using energy efficient LED lights to set up compliant factories. The LED bulbs of less watts can provide more light than CFL bulbs. They are also three times more durable than normal bulbs.

The entrepreneurs said the energy saving CFL bulbs are very dangerous for environment and have more health threats as mercury is used in those bulbs. This substance is not renewable. It is poisonous and unsafe for human health and contaminates soil as well. On the other hand, LED bulbs are not harmful for environment and human health as no dangerous substances including mercury are used in them.

The entrepreneurs claimed that the LED bulbs industry will expand fast if the existing VAT on production and import of raw materials is withdrawn. Moreover, the prices of LED lights will decrease which will encourage people to use them saving a vast amount of electricity that could be supplied to new industries. The move will also lead to speed up economic wheel.


risingbd/Dhaka/Apr 1, 2017/Milton Ahmed/Nasim