‘Due to cancellation of the Pohela Boishakh celebration and pandemic coronavirus, the sales of yarn and fabrics have come to a standstill’
Bangladesh Textile Mills Association (BTMA) has urged the government to withdraw value added tax (VAT) from yarn and fabrics used for local consumption as the sector is hit hard following the abrupt cancellation of Pohela Boishakh celebration publicly amid the coronavirus pandemic.
BTMA President Mohammad Ali Khokon, in a letter to the finance ministry recently made the demand to combat the economic fallout of the coronavirus.
Pohela Boishakh is the second largest festival for fashion industry in the country after the Eid-ul-Fitr as the sector people largely depend on the sale of these two festivals.
According to BTMA, there are 450 spinning mills in the country, of which about 250 produce yarn and fabrics for local consumption, while 500 weaving mills out of 850 mills make yarn and fabric to meet local demands.
“Due to cancellation of the Pohela Boishakh celebration and pandemic coronavirus, the sales of yarn and fabrics have come to a standstill. As a result, the cash flow of the business people shrank and they fell short of working capital to pay the workers’ wages,” said Khokon in his letter.
Besides, mills were unable to realize their dues as the celebration of Pohela Boishakh is suspended due to the shutdown, it added.
As per the BTMA data, about 1.5 million people are directly or indirectly dependent on the sector.
“As of now, there are unsold stock of yarn and fabrics worth Tk3, 500 crore due to the coronavirus impact and cancellation of Bangla New Year celebration,” the letter said further.
However, the BTMA thanked Prime Minister Sheikh Hasina for announcing stimulus package of Tk5,000crore for the export-oriented sectors.
“Considering the present situation, we are urging the government to withdraw the VAT from yarn and fabrics from March 20 to June 2020.”
The BTMA also called to keep the utility services such as gas and electricity bills for six months to a block account and allow paying within next twelve months in installments without any surcharge.
In addition, the association also demanded duty- free import of all kinds of chemicals used for dyeing and finishing with the certification of the BTMA till June 30.
It also demanded waiver of demurrage charges on imported goods at Chittagong Port and other ports from March 20 to June 30.