Exporters with bonded warehouses face challenges with their finished products as bonded warehouses are overcrowded as many global buyers canceled export orders during the waves of the Covid pandemic.
Although the customs wing of the National Board of Revenue offered an extended period for exporters to take advantage of the bonded warehouse facility to overcome the Covid crisis, but exporters demanded that the NBR allow them to obtain a duty-free access to the local market to minimize their financial losses.
The Bangladesh Garment Manufacturers and Exporters Association appreciated the NBR’s decision, but the trade body demanded that it be allowed to sell the finished products in the local market to recoup the money spent on manufacturing the products.
BGMEA Vice President Md Shahidullah Azim said amid the global trade crisis, exporters lost a large number of orders, causing raw materials and finished products to be stuck in their warehouses.
He said: “The decision to offer an extended period might give us more time, but the risk is still high for us, especially for those who have made products using the raw materials during the bond period, but the cancellation of orders by buyers created a warehouse crisis. ‘
“In this situation, we urge the NBR to allow us to gain duty-free local market access, which could help the exporter to overcome the financial losses,” he said.
“The increase in the number of new Omicron variants in Europe has added risks for exporters to meet the shipment deadline, which could create another crisis for exporters benefiting from bonded warehouse facilities.” , he added.
The NBR recently issued a regulatory order that relaxed the rules regarding the period of detention of imported raw materials duty-free by bonded warehouse licensed companies with a number of conditions.
The conditions for benefiting from a flexible period by an exporter include maintaining the qualitative standards of the raw materials stored, the ability to export finished products using the raw materials and having up-to-date audit reports.
The latest circular, signed by Customs Wing Second Secretary Moshiur Rahman Mondol, empowers senior customs officials to grant an extended bond period with the approval of the tax administration.
The customs commissioner or other authorized commissioners may review exporters’ claims, on a case-by-case basis, if all conditions labeled under the circular are met.
The Customs Exports and Bonds Division issued the circular under Sections 119A and 219B of the 1969 Customs Act.
In accordance with the Customs Act, exporters can be granted a bond period to keep products duty free in warehouse for up to 24 months for garment units, which may vary from industry to industry. the other. Industries geared towards exporting under a bonded warehouse, including those in free zones, economic zones and high-tech parks will appreciate these facilities.