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Import Tariff Policy
Customs duty varies between 7.5% and 50% and has been lowered significantly
in recent years. Import duty is determined along the lines set out
in the table below. Custom duties are levied on all imports except
raw cotton, textile machinery, certain machinery used in irrigation
and agriculture, animal feeds used by the poultry and dairy industries,
certain drugs and medical equipment. The average trade weighted import
tariff rate has been brought own from 42% in 1991/92 to 28% in the
fiscal year 1993/94. Preliminary government figures suggest that the
average trade-weighted import tariff has been brought further down
to around 21% in the first half of the financial
year 1994/95.
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| Bangladesh Custom
Duty Rate |
Item
|
Customs Duty Rate |
| Few items,
mostly inputs |
7.5 – 15% |
| Basic raw
materials |
15 – 22% |
| Intermediate
products |
22.5 – 30% |
| Finished
products |
30 – 50% |
| |
|
Bangladesh’s commitments in its WTO tariff schedule are negligible.
A small number of agricultural and
machinery items are bound at 50%, with a 30% surcharge. All other
products are bound at the prohibitive rate of 200%.
Non-tariff
Barriers
Unless otherwise specified, all imports transacted through a bank
require a Letter of Credit Authorisation (LCA) Form. Import of most
items must be done through opening a Letter of Credit (L/C). Once
the LCA has been issued and the L/C opened, a number of documents
must be presented to the executing bank. In the case of a public-sector
importer, documentation of allocation including source, amount and
purpose signed by the allocating authority documentation of sub-allocation
to importing agency and a declaration on utilization of the government
funds must be presented. For a private sector importer, documentation
of renewal of the Import Registration Certificate, income tax documentation
and other documents required by Import policy order etc. must be submitted
together with the LCA.
One major obstacle in trading is the continued lack of transparency
in the policy and regulation changes, which are often unclear and
inconsistency in the Customs Services to treat import shipments on
a discretionary basis. The customs procedures are lengthy and burdensome
and are further complicated by rent-seeking activity and incidents
where commodities are stuck at the entry point for an extensive time,
as commonly reported. The tariff schedule, which is used to calculate
import duty, has been known to change frequently even when goods are
in transit. While import tariffs have been reduced in recent years,
the use of fixed tariff values have in many cases resulted in an effective
tariff rate far beyond the apparent rate. Thus, custom duty is paid
on a fixed tariff value of the imported goods rather than on the actual
price. In cases where the tariff value is significantly higher than
world market prices, the actual import tariff exceeds the apparent.
However, the tariff values have only to be used for calculation of
customs duty and are not providing lower minimum ceilings on import
prices. The fixed tariff value system has recently been supplemented
through the acceptance of pre-shipment inspection certificates from
four international inspection companies, but so far these acceptance
of these certificates is not mandatory to the Customs Services.
Levies and Charges (Other than Import Duties)
An additional import permit fee of 2.5% is paid on most imported items
and a trade-neutral value – added tax (VAT) of 15% is added
to the price of all traded goods, Excise duties have been abolished
on all items except manually prepared cigarettes and textiles. Certain
items are exempted from VAT, including those exempted from customs
duty mentioned above and items from small and cottage industries.
A supplementary duty is levied on luxury items such as cars with an
engine capacity greater than 1,000 cc, some electronic devices such
as computers and "undesirable" items such as cigarettes.
This duty exceeds 100% in some cases.
Import Prohibitions
Items banned under the Bangladesh Import Policy Order 1993/95 is:
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Maps, carts and geographical globes
which indicated the territory of Bangladesh not in conformity
with the maps published by the Government's Department of Survey. |
|
Horror comics, obscene
and subversive literature. |
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Printed material, posters, video
tapes, etc. containing matters likely to outrage the religious
feelings and beliefs of any class of citizens in Bangladesh. |
|
Unless otherwise specified, old second
hand and reconditioned goods. |
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Unless otherwise specified, all kinds of waste.
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Other items completely banned are: live pigs, pig and poultry fat,
poppy seeds, grass, opium, tendu leaves, lard, lard and tallow oil,
solid and semi-solid palm oil, raw sugar, un-denatured ethyl alcohol
(80% and higher) and other spirits denatured of any strength, wine,
artificial mustard oil, woven fabrics of silk or silk waste, pig hair,
some types of padlocks (up to three inches), vessels more than 15
years old and single phase electricity metres.
In addition, goods from, or originating in, or imported in flag vessels
from Israel are prohibited.
Trade Concessions
Bangladesh is a member of World Trade Organization and enjoys GSP.
It is also a member of SAPTA.
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Foreign
Exchange Controls
The Taka is almost without exception freely convertible for current
account transactions. The Bangladesh Central Bank has a foreign currency
reserve of 8–9 months’ import or US$ 2.7 billion, ensuring
the availability of foreign exchange. There is no limit to the amount
of foreign exchange that may be brought to Bangladesh, but all foreign
currency exceeding the amount of US$ 5,000 must be declared upon entry,
and visitors should be prepared to account for it on departure. Financial
transactions should only be done through authorized channels, available
through domestic and foreign commercial banks. Two European Banks
have branches in Bangladesh: Banque Indosuez and Standard Chartered
Bank. A joint venture Bank, which is the Dutch-Bangladesh Bank, has
recently opened. Societe General (SG) has recently opened a liaison
office.
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| Packing,
Marking and Labelling |
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All goods should be
marked with an indication of origin if they bear any trademarks
or works in the English language. |
|
Markings indicating quantity, weight,
measurements, trade descriptions, component materials or purity
of the product must be accurate. |
|
All dyes, chemicals and pharmaceutical
products should be marked with a full description of the product,
including quality and code numbers. |
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Dangerous or poisonous drugs and
medicines must be marked to show the ingredients. |
|
Special regulations govern the marking
of patent or proprietary medicines. |
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Piece goods, sold by the length or
by piece, made wholly or partly of cotton or wool, must also
be marked with the yardage. |
|
Packages should bear the consignee’s mark,
including the port mark. They should be numbered, unless the
shipment is such that the contents of the package can be readily
identified without them. |
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Quality Standards
Quality standards are set and monitored by the Bangladesh Standards
and Testing Institute, which is a member of ISO. Bangladesh also recognizes
and accepts goods bearing certification from standard institutions
of other countries. Standards for pharmaceuticals and all imported
food are controlled by separate government agencies. Neither the imported
goods nor their containers must bear text or pictures which may harm
the religious feelings and beliefs of any citizen of Bangladesh.
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Insurance: Must be effected
with the Sadaran Bima Corporation or any Bangladesh Insurance
Company. |
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Pro-Forma Invoice: It is required
by the importer to obtain an import registration certificate
and/or Letter of Credit to cover payment of imports. A minimum
of five copies should be issued, containing a full description
of the goods, the country of origin, gross and net weights,
the full CFR value or FOB plus freight charges. Follow the importer’s
instructions. |
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Bill of Lading: No special regulations.
Maybe made out "to order ". Usually, three copies
are required. |
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Certificate of Origin: May be requested
by the importer/ bank or in the Letter of Credit clause. Usually,
three to six copies are required. It should be certified by
a chamber of commerce and signed by a responsible member of
the exporting firm. |
|
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Commercial Invoice: There is no prescribed
form for the commercial invoice. A minimum of three copies should
be issued and should contain the following: name and address
of the shipper and consignee, date and port of shipment, port
of destination, name of vessel, bill of lading number plus date
thereof, marks, numbers, weights and measurements of packages,
type of packages, value of goods, Letter of Credit number and
date thereof, import licence number and import registration
number. The manufacturer of shipper must sign it. The commercial
invoice should contain the following declaration: "We certify
that the goods are in accordance with (pro-forma invoice or
indent number), (date) and that they are of (stipulate country)
origin". The invoice must be certified by a chamber of
commerce and signed by the exporter. |
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Packing List: Not a mandatory document,
however its use will facilitate clearance. |
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Pre-shipment Inspection: There are no mandatory
pre-shipment or post shipment quality or quantity inspection
requirements for the private sector imports. |
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| Other Documentation |
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Certificates of analysis
may be required for some foodstuffs and pharmaceuticals. |
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A certificate of health is required
for all plants and plant products, seeds and livestock. |
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A certificate of cleanliness, signed by the physician
with the letters MD following the signature, is required for
imports of used clothing. |
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| Commercial Samples |
| Samples of non-commercial
value are admitted duty free. Samples having commercial value
are liable to normal duty. |
Free Trade Zones
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Chittagong Export Processing
Zone (CXPZ) |
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Dhaka Export Processing Zone (DEPZ) |
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