The National Board of Revenue (NBR) has announced plans to end the tax exemption for the Metro Rail authority starting July this year.
Last year, the NBR had granted a VAT exemption on metro rail ticket prices due to the service not being fully operational at the time. However, the NBR now aims to revoke this exemption to increase revenue from this sector, as stated by an NBR official.
According to the law, a 15% VAT is applicable to both air-conditioned (AC) and non-AC railway services. Section 26 of the Value Added Tax and Supplementary Duty Act 2012 does not provide exemptions for passenger transport services, including temperature-controlled (AC) and first-class non-AC railway services.
Since the metro rail is fully temperature-controlled, a 15% VAT will be applied to this service, explained the official.
Following the imposition of a 15% VAT, the minimum distance ticket price will increase to Tk23 from the current Tk20, while the maximum distance ticket price will rise to Tk115 from Tk100, the official added.
