DHAKA: Industries established in Bangladesh’s export-processing zones (EPZs) now enjoy free import of all capital machinery and spares, subject to submission of bank guarantee.
The customs wing of the National Board of Revenue (NBR) issued a statutory regulatory order (SRO), dated March 20, 2017, offering the duty-exemption for the industries located in the EPZs across the country. However, the NBR tagged some conditions to the duty-free-import facility.
Officials said the EPZ industries were always exempt from payment of customs duty, regulatory duty, supplementary duty and Value Added Tax (VAT) at import stage but the waiver was dropped from the finance bill 2015.
Later, the customs wing issued a special order for the EPZ industries so that they can release imported machinery and parts without duty-taxes. However, the exporters had to give bank guarantee equivalent to the duty-taxes to release duty-free machinery from customs.
Officials said Bangladesh Export Processing Zones Authority (BEPZA) had requested the NBR to address the issue as it was giving a negative signal to the investors.
Nazma Binte Alamgir, General Manager (public relations) of BEPZA, said the SRO would make the investment process smooth in EPZs.
“As the exemption of duty-taxes was not mentioned in the SRO, the investors had to face hassle when customs officers concerned were transferred,” she said.
With the issuance of the latest SRO, the EPZ industries will not have to give bank guarantee to get their duty-free machinery and parts released.
As per the conditions set in the SRO, the EPZ entrepreneurs will have to complete import of machinery and spares within one year of the submission of bill of entry of the first-chalan import.
In case of machinery for high-tech and large-scale industries, the NBR can extend the time up to three years on the basis of application by the importers.
EPZ industries will have to submit import permit from BEPZA for importing machinery and parts.
They will not be permitted to use the duty-free machinery for other purposes apart from their own industries. In case of use of duty-free machinery on other purposes or handover, the customs authority would impose penalty as per law.
A BEPZA-authorized official will conduct physical inspections to ensure proper installation of the machinery and parts in right industries.
A report on release of imports of last six months, signed by EPZ director general (DG), has to be submitted to the commissioner of customs.
The SRO carries a prescribed format of undertaking and certification form for the EPZ industries.
Such industries have to give an undertaking at the time of release of duty-free products. After getting the report, the customs authority would return the undertaking otherwise all of the duty-taxes applicable to the imported machinery would be realized from the industries concerned.
