Bangladesh Relaxes Import Limit On RMG Raw Goods Already Shipped

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National Board of Revenue has relaxed restriction on the import of raw materials, which have already been shipped, under free of cost scheme for readymade garment industry.

Export-oriented RMG manufacturers have been allowed to release the excess raw materials, mainly fabrics, imported beyond the permissible limit under the FOC scheme.

Customs wing of the revenue board on May 3 issued a special order permitting release of excess amount of raw materials on some conditions. According to the current Import Policy Order and NBR rules, a 100% export-oriented garment manufacturer can import raw materials worth one-third of its total export earnings in previous year under the scheme without paying any duty and other taxes.

Foreign buyers sometimes directly provide raw materials free of cost for manufacturers to speed up export process. But many importers from readymade garment sector in recent times imported raw materials, mainly fabrics, up to several times the limit beyond the permissible level.

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There is no scope in the import policy order to release the additional amount of imported raw materials, customs officials said.

But, NBR relaxed the provisions following demand of Bangladesh Garment Manufacturers and Exporters Association and other associations as many apparel exporters have already brought excess raw materials under the facility, they said.

NBR also considered the issue of export facilitation as some problems were created over release of FOC raw materials, they added. BGMEA leaders claimed that export activities were being hampered as customs officials were declining to release the excess raw materials from the Chittagong port.

Chittagong Customs House officials were also delaying to release FOC goods within permissible limit, they alleged. Officials said that customs houses had in recent times became cautious in releasing FOC goods after customs intelligence detected duty evasion and misuse of the benefit.

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Some importers brought raw materials several times higher than the limit and sold them in local market instead of producing finished goods for export. According to the NBR order, raw materials only recently imported, unreleased and those which have already been shipped will get the benefit.

An importer will have to submit certificate issued by the BGMEA and lien bank, copy of utilisation declaration and export order to the customs house for releasing the excess raw materials.

Customs house will release the consignments if it finds the documents accurate and satisfactory, the order stated. NBR will demand the applicable taxes and duty on the released raw materials if finished goods produced using the raw materials are not exported, it said. The relaxation would not be applicable in any way for closed or non-existent RMG factories, NBR said in the order.

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It also instructed the customs officials to immediately release the raw materials that remained within the limit or one-third of the total export of previous year (January to December). It said that the facility would not be applicable for goods imported in future after releasing the current consignments.


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