Govt moves to increase BSTI certification fees by 200pc

Jasim Uddin | Published at 12:10am on August 27, 2018

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BSTI product certification mark is seen on a packet of bread at a shop in Dhaka on Saturday. The government has initiated a move to increase product certification fees of Bangladesh Standard and Testing Institution by almost 200 per cent. — New Age photo

The government has initiated a move to increase product certification fees of Bangladesh Standard and Testing Institution by almost 200 per cent.
According to officials of industries ministry and the BSTI, the move has been taken to meet the increasing operational costs for additional manpower and new offices.
The number of BSTI employees and offices was increasing in line with expansion of production base and overall economic activities, they said.
The country’s standardisation body determines the national standard for any product and issues certificates after examining the quality of products.
It collects various types of fees, including BSTI standard marking fees, from manufacturers for using the certification marks (CM) on the label of products and collects fees by issuing licences.
The BSTI meets the operational costs from its income as the government does not provide any grant to the body.
It currently has eight divisional offices and five offices in five districts, which are not adequate for handling the manufacturers’ increasing demand for standardisation services in a growing economy, officials said.
The BSTI has initiated a process of establishing its offices in all districts across the country.
In the context, the industries ministry formed a committee headed by its additional secretary AKM Shamsul Arefin to revise the existing fees upward.
BSTI director (certification marks) SM Ishak Ali, also member secretary of the committee, told New Age on last Sunday that the schedule of the existing fees had not been revised after fixing it in 1994.
But in the meantime, the cost of chemicals required for carrying out testing activities to provide quality certificates to producers and the cost for manpower and office management rose significantly over the years, he said.
The BSTI’s decision to gradually establishing its offices in all districts would also increase the operational costs, he added.
Officials said that as the government would not provide any additional funds to the body, the only way to meet additional expenditures was to increase income from own sources through issuing certificates and certification marks.
The BSTI Council in 1994 fixed the CM fees at 0.10 per cent of annual production value (ex-factory price) for fruit-based products and 0.15 per cent for other products like food, milk, drinks, spices, chemical, leather goods, plastic, fertiliser and pesticide, textile, machinery, electrical and electronic, construction, engineering and melamine.
Later in 1997, the council reduced the fee to 0.07 per cent with minimum Tk 1,250 and highest Tk 10 lakh for fruit products and to 0.10 per cent with minimum Tk 1,875 and maximum Tk 15 lakh for other products. The council also kept a provision for allowing rebate of up to 50 per cent of the fee.
BSTI officials said that the nature of businesses had been changing over the years in the country. Several large groups of companies are now producing products like bread, biscuit, chanachur, atta, maida, turmeric and pepper chilli which were used to be produced by small and cottage industries. The number of cottage industries has also been declining because of the trend causing a fall in BSTI revenue.
On the other hand, the BSTI cannot collect additional revenue for the increased volume of annual production of big industries due to the restriction related to the upper limit of fees.
In the context, the BSTI has proposed to raise the marking fee to 0.15 per cent for all products except for fruit-based ones from existing 0.10 per cent.
The institution has also proposed to raise the highest fee to Tk 44,48,250 for annual value above Tk 400 crore for the products from the existing Tk 15 lakh for value above Tk 150 crore.
It has also proposed to increase the minimum fee to Tk 4,000 from existing Tk 1,875 for the category.
The body has, however, proposed to increase the rate of rebate to 60 per cent from existing 50 per cent.
Manufacturers of all products except for fruit-based ones now pay, after availing rebate, Tk 93,750 for annual product value ranging from Tk 1 crore to Tk 10 crore; Tk 1.81 lakh for value up to Tk 20 crore; Tk 4.25 lakh for value up to Tk 50 crore; Tk 8 lakh for value up to Tk 100 crore; Tk 11,43,750 for value up to Tk 150 lakh; and Tk 15 lakh for value above Tk 150 crore.
In the proposed fee structure, the payable fees after availing rebate are Tk 1,43,250 for value ranging from Tk 1 crore to Tk 10 crore; Tk 2,78,250 for value up to Tk 20 crore; Tk 6,60,750 for value up to Tk 50 crore; Tk 12,60,750 for value up to Tk 100 crore; Tk 18,23,250 for value up to Tk 150 crore; Tk 23,48,250 for value up Tk 200 crore; Tk 32,48,250 for value up to Tk 300 crore; Tk 38,48,250 for value up to Tk 400 crore; and Tk 44,48,250 for value above Tk 400 crore.
The BSTI has also proposed to increase the fees for fruit-based products.
Officials said that the committee having representation from trade bodies including the Federation of Bangladesh Chambers of Commerce and Industry and Dhaka Chamber of Commerce and Industry held its first meeting in July.
The decision would be finalised after accommodating opinion from stakeholders, particularly manufacturers, they added.