For over three months, readymade garment exporters are grappling with a perplexing tax provision at the Chittagong Port, subjecting them to a 15 per cent VAT on various services related to imports and exports.
This tax, applied to service charges like container storage rent, unstuffing charges, and river dues, results in an additional cost exceeding Taka 1,000 per TEU (twenty-foot equivalent unit) container, according to industry leaders.
Despite two statutory regulatory orders (SRO) issued by the National Board of Revenue (NBR) in 2019 and 2021, granting a 100 per cent VAT exemption on port services for fully export-oriented industries and export processing zones, the Finance Act of 2022 reportedly withdrew the “zero” VAT rate on services related to international transportation and loading/unloading from ships, effective 1st July 2022.
Following a letter from the Chittagong Customs, Excise, and VAT Division to the chairman of the Chittagong Port Authority on 4th July 2022, requesting VAT collection on specific services, the port authorities began enforcing the 15 per cent VAT from 27th September 2023.
Expressing dissatisfaction, garment factory owners argue that the VAT collection is unreasonable, considering the NBR’s prior tax exemption in the SRO.
Bharat Tex Special Report 2026 
