BONDED WAREHOUSE FACILITY

Businesses, mainly RMG, enjoy Tk 34,880cr duty benefit in FY17

Jasim Uddin | Published: 23:01, Dec 06,2017 | Updated: 23:17, Dec 06,2017

 
 

A file photo shows workers busy in sewing clothes at a readymade garment factory in Dhaka. Export-oriented industries enjoyed tax exemption worth Tk 34,880 crore in import of raw materials in last fiscal year of 2016-2017 under the bonded warehouse benefit offered by the National Board of Revenue. — New Age photo

Export-oriented industries enjoyed tax exemption worth Tk 34,880 crore in import of raw materials in last fiscal year of 2016-2017 under the bonded warehouse benefit offered by the National Board of Revenue.
The amount is more than 77 per cent of total customs duty of Tk 45,193 crore collected in the year.
Readymade garment industries availed the highest — 96 per cent or Tk 33,612 crore — in exemption in taxes and duties through duty-free import of raw materials in the year.
Under the bonded warehouse facility, 100 per cent export-oriented industries enjoy duty-free raw materials import on condition that they will export finished goods produced using the raw materials.
Tax exemption at the import stage to the industries rose by 129 per cent in last nine years since the FY 2008-2009 when the total value of exemption was Tk 15,224 crore, according to available data of the revenue board.
Bond licence holding factories availed tax exemption worth more than Tk 30,000 crore in the FY 2015-2016.
Currently, there are 4,909 active bond licensees in the country. Of them, 2,847 are from the RMG sector and the remaining 2,062 are from other sectors.
Officials of the revenue board said that the amount of exemption had been rising following higher import of raw materials by the industries led by growth in export earnings.
The amount of exemption will rise in future as the revenue board has offered the benefit for all factories located at the economic zones, they said.
The NBR is also considering offering the benefit to some other 100 per cent export-oriented industries, they added.
The NBR in 1980 first offered bonded warehouse facility to the RMG sector.
Later, the benefit was extended to some other 100 per cent export-oriented industries and deemed exporters like factories located at export processing zones, RMG accessories including plastic and carton, paper board, leather and footwear, shipbuilding, light engineering and some other sectors.
The revenue board is also considering offering the benefit to some other 100 per cent export-oriented industries to facilitate the sectors to grow in export market, officials said.
It also offered duty-free raw materials import facility both for export-oriented and domestic market-oriented factories located at the economic zones of the Bangladesh Economic Zone Authority to facilitate employment generation and economic growth, they said.
They said that the amount of exemption would be higher if the benefits offered to other exporting industries were taken into consideration.
Exporting industries, except 100 per cent export-oriented ones, have to pay tax during import of raw materials. But they get back the paid tax in the form of duty drawback from the NBR.
According to a report prepared by Policy Research Institute chairman Zaidi Sattar using the NBR data, total value of bonded import was Tk 50,060 crore in the FY 2016-2017.
Businesses would have to pay Tk 34,880 crore in duty and taxes applicable on regular import if there was no bonded facility.
Of the amount, the RMG sector alone enjoyed Tk 33,612 crore in import duty exemption against import of RMG inputs like fabrics, yarn and accessories worth Tk 47,795 crore.
The footwear sector enjoyed tax exemption worth Tk 47 crore on import of shoe lasts and soles, finished leather, buckles and hooks while the other sectors enjoyed Tk 1,221 crore in exemption against import of paper and paper board, plastic packing materials, adhesive plates, polymers or ethylene, fruits and nuts.

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