The National Board of Revenue plans to expand bond facility for all business entities in the country’s Economic Zones, a source said.
Following a decision of government’s high ups to accelerate economic activities in the country’s EZs, the revenue authority has made the move, an NBR official concerned said.
Currently, the NBR is providing this special facility only to cent percent export-oriented manufacturing sectors, including the RMG sector.
The Customs Bond Commissionerate (CBC) issues bonded warehouse license mostly known as bond license to the bond-eligible factories.
The factories under this system are allowed to import their raw materials duty-free, but the condition here is, they cannot sell any finished goods in the local markets.
A few types of home-consumption manufacturing sectors can also avail this facility, but they have to pay the duty before discharging their goods from the warehouse.
As per the NBR’s new decision, all the business entities located in economic zones will be allowed to enjoy the bond facility.
An official of NBR said, they will also form a central bonded warehouse at each economic zone where the traders of respective areas would preserve their imported goods for a certain period.
Currently, if any home-consumption goods manufacturer imports raw materials under this facility, they have to pay the duties when they discharge it from the warehouse.
But the NBR, in line with the new move is set to offer flexibility for the EZ’s manufacturers, that is, the non-exporters here will be allowed paying the duties at the time of supply of finished goods to the markets.
NBR Member for Customs Export Bond and IT, Sultan Md Iqbal said that as part of the government’s decision to give more incentives to the businesses, the NBR has decided to expand bond facility for all business entities located in the economic zones.
“It will expedite the business activities in economic zones,” he added.
However, some NBR officials on condition of anonymity said, if the new decision comes into force, it will raise imparity to other local manufacturers.
NBR source said, CBC will issue bond license in three categories, cent percent export oriented factories, factories engaged with both export and local consumption, and cent percent local-consumption based business entities in EZs.
In this connection, any businesses interested in taking bond facility, will first have to obtain a bond license from CBC, and also have to follow some conditions.
A trader here must submit a report about the capacity of his or her factory’s production, and an assurance that they will not shut down the business without any logical reason. The CBC authority will look into the transparency of their declared information.
According to the new provision, there will also be a central bonded warehouse in all economic zones where all the imported raw materials will be stored as per the bonded warehouse rules.
As per the Bangladesh Economic Zones Warehousing Station rules-2017, bond facility in economic zones is given in three categories, export-processing area, local processing area, and commercial area.
But some disputes arose when the decision was underway that all types of business firms will be able to enjoy bond facility in economic zones areas, as it is contradictory to the Customs Act-1969 and VAT Act-1991.
However, Economic Zones Authority and NBR with the intervention of government’s high-ups, finally decided that all the traders of economic zones’ areas would be provided this facility.