Regulatory Alerts2024-01-30
Added
FEPD Circular No. 02: Export Subsidy/Cash Incentive for the financial year 2023-2024
The document establishes export subsidy and cash incentive rates for goods manufactured in Bangladesh and exported between January 1, 2024, and June 30, 2024, in compliance with WTO ASCM agreements. It mandates the gradual phase-out of cash incentives for specific sectors, including garments, to ensure long-term sustainability, while maintaining existing procedural instructions for application verification. The circular specifies incentive percentages ranging from 0.00% to 15.00% across various industries such as textiles, jute, leather, pharmaceuticals, and electronics.
Export Policy Division Bangladesh Bank Head Office Dhaka. www.bb.org.bd
FEPD Circular No. 02 Date: ---------------------
To All Concerned Dealers.
Dear Sirs,
Export Subsidy/Cash Incentive for the financial year 2023-24.
With reference to your attention to FEPD Circular No. 13, dated August 24, 2023.
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To promote the country's export-oriented economy, the government has provided export subsidy/cash incentive for the current financial year 2023-24. It is considered as Export Contingent Subsidy under WTO regulations and cannot be provided for any export subsidy/cash incentive that is inconsistent with the Agreement on Subsidies and Countervailing Measures (ASCM). By the year 2026, the graduation of Bangladesh from the list of developing countries will occur. Considering that the export sector may face long-term difficulties if export subsidy/cash incentive is abruptly withdrawn during the post-graduation period, the government has decided to gradually reduce the cash incentive rate for various sectors from January 1, 2024.
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In view of the above, in addition to the specific conditions mentioned in FEPD Circular No. 13, dated August 24, 2023, the export subsidy/cash incentive for goods manufactured and exported between January 1, 2024, and June 30, 2024, will be applicable according to the attached table (Annex-A). The existing instructions for verification of applications for export subsidy/cash incentive will remain unchanged. All other instructions contained in the FEPD Circulars/Dealers' Instructions applicable for providing export subsidy/cash incentive will remain unchanged as usual. Additional instructions will be issued if necessary regarding any other matter.
Yours faithfully,
(Sumaira Sultana Hasan) Director (FEPD) Phone No: 9530123
Magh 16, 1430 January 30, 2024
Ref: Annex-A (2 pages)
Ref: FEPD Circular No. 02/2024 Annex-A
Export Subsidy Rate Applicable for Goods Manufactured and Exported between January 1, 2024, and June 30, 2024
| S.No | Name of Sector | Applicable Rate |
|---|---|---|
| 1. | Cash Incentive in lieu of Duty Drawback and DWU for Garment Sector | 3.00% |
| 2. | Special Incentive for Air Freight for Garment Buyers exceeding 3% of Europe Sector | 1.00% |
| 3. | Cash Incentive for Knitwear Sector (Yarn, Woven and Sweater) for all types of large and medium enterprises | 4.00% |
| 4. | New Market/New Buyer (Textile) Promotion Support (Except America/Canada/EU/UK/India/Japan/Australia)<br><br>Cash Incentive is provided for both Cotton and Non-Cotton (Man Made Fibre) raw materials for yarn promotion. Therefore, this incentive is applicable for Knitwear manufactured from Non-Cotton (Man Made Fibre) if verified. However, this incentive is applicable for New Buyer or New Market as a separate incentive.<br><br>3.00% | 3.00% |
| 5. | Special Cash Incentive for Knitwear Sector | 0.50% |
Note: For Items 1-5: Export subsidy/cash incentive for garments manufactured and exported from January 1, 2024, will be excluded for the following five HS Headings in accordance with ASCM Articles 6105; 6107; 6109; 6110 and 6203 of the WTO Agreement on Subsidies and Countervailing Measures.
| S.No | Name of Sector | Applicable Rate |
|---|---|---|
| 6. | Export Subsidy for Jute-based Export Sector:<br>a) Diversified Jute product<br>b) Jute-based Carpet (Hessian, Sacking and Sieve)<br>c) Jute Yarn (Yarn and Sutra)<br><br>(The diversified jute products mentioned in the Jute Act, 2017 must contain at least 50% jute by weight)<br><br>15.00%<br>7.00%<br>5.00% | 15.00%<br>7.00%<br>5.00% |
| 7. | Export Subsidy for Leather-based Export Sector (Selling limit remains unchanged) | 12.00% |
| 8. | Export Subsidy for Handmade Products (Shagola, Khadi, Coconut/Date Palm Husk, Tree Leaves/Bark, Gomta Silk - Cotton Cloth etc.) Export Sector | 8.00% |
| 9. | Export Subsidy for Bone, Horn, Tooth and Hoof (Except Bone) Export | 8.00% |
| 10. | Export Subsidy for Frozen Shrimp and Frozen Fish Export Sector:<br>a) Frozen Shrimp Export Ice Consumption Rate<br>Up to 20%<br>Above 20% to 30%<br>Above 30% to 40%<br>Above 40%<br><br>b) Frozen Fish Export Ice Consumption Rate<br>Up to 20%<br>Above 20% to 30%<br>Above 30% to 40%<br>Above 40% | 9.00%<br>8.00%<br>7.00%<br>6.00%<br>4.00%<br>3.00%<br>2.50%<br>2.00% |
| 11. | Export Subsidy for Vegetable (Vegetable/Fruit) and Spice (Spices) Export Sector | 15.00% |
| 12. | Export Subsidy for Herbal Export Sector | 15.00% |
| 13. | Export Subsidy for Handicraft Export Sector | 12.00% |
| 14. | Export Subsidy for 100% Halal Meat and 100% Halal Meat-based Products Export Sector | 15.00% |
| 15. | Export Subsidy for Crust and Finished Leather manufactured in factories located in Savar Leather City and factories located outside Savar:<br>a) Crust Leather<br>b) Finished Leather | 0.00%<br>7.00% |
| 16. | Export Subsidy for:<br>a) Jute Carpet-Jute Export<br>b) Jute Carpet-Jute Export for Polypropylene Fiber manufactured from Jute Carpet-Jute | 8.00%<br>8.00% |
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| S.No | Name of Sector | Applicable Rate |
|---|---|---|
| 17. | Export Subsidy for Ship Export | 8.00% |
| 18. | Export Subsidy for Carbon and Charcoal manufactured from Jute Stick and Jute Stick for Incense Stick Export | 10.00% |
| 19. | Export Subsidy for Seed and Vegetable Seed Export | 10.00% |
| 20. | Export Subsidy for Financier Export | 10.00% |
| 21. | Export Subsidy for Ceramic Export | 8.00% |
| 22. | Export Subsidy for Paper and Paper-based Products manufactured in the country | 7.00% |
| 23. | Export Subsidy for Agar and Attar Export | 10.00% |
| 24. | Export Subsidy for Active Pharmaceuticals Ingredients (API) Export | 10.00% |
| 25. | Export Subsidy for Accumulator Battery (HS code: 8507.10 and 8507.20) Export | 12.00% |
| 26. | Export Subsidy for Synthetic and Artificial Fiber Yarn and Thread Export | 10.00% |
| 27. | Export Subsidy for:<br>a) Software, ITES (Information Technology Enabled Services) and Hardware Export from Bangladesh<br>b) Software, ITES and Service Export for R&D Centers<br><br>8.00%<br>3.00% | 8.00%<br>3.00% |
| 28. | Export Subsidy for Pharmaceutical Products (Medicinal/Surgical Instruments and Appliances) Export | 8.00% |
| 29. | Export Subsidy for Smart Cycle Export | 8.00% |
| 30. | Export Subsidy for Photovoltaic Module Export | 8.00% |
| 31. | Export Subsidy for Jewelry and Jewelry Products Export | 8.00% |
| 32. | Export Subsidy for Sirimuk Export | 8.00% |
| 33. | Export Subsidy for Ship Export | 9.00% |
| 34. | Export Subsidy for Crab and Lobster (Frozen, Softshell and Live) Export | 8.00% |
| 35. | Export Subsidy for Galvanized Sheet/Coils (Coated with zinc, Coated with Aluminium and Zinc and Color Coated) Export | 8.00% |
| 36. | Export Subsidy for Chemical Products (Sulphuric, Hydrochloric Acid) Export<br><br>Caustic Soda and Hydrogen Peroxide - Cash incentive withdrawn for exports shipped from January 1, 2024.<br><br>7.00% | 7.00% |
| 37. | Export Subsidy for Consumer Electronics, Electrical Appliances and Kitchen Appliances Export | 8.00% |
| 38. | Export Subsidy for Rice Export | 5.00% |
| 39. | Export Subsidy for Tea manufactured in the country | 3.00% |
| 40. | Export Subsidy for MS Steel Products manufactured in the country | 3.00% |
| 41. | Export Subsidy for Bicycle and its Parts manufactured in the country | 3.50% |
| 42. | Export Subsidy for Semiconductor Circuit manufactured in the country | 3.50% |
| 43. | Specialized Chemical (Dye, Pigment and High-tech Paint) and Organic Chemical Export under FEPD Circular No. 34/2021:<br>1) Export of Knitwear Sector (Except Special Cash Incentive for Knitwear Sector under FEPD Circular No. 01, dated January 07, 2020) under the first part (a) sub-part of the first part of FEPD Circular No. 34/2021<br>2) Export of Spice-based Vegetable Export under the first part (b) sub-part of the first part of FEPD Circular No. 34/2021<br>3) Export of Organic Chemical under the first part (a) sub-part of the first part of FEPD Circular No. 01, dated January 07, 2020, Special Cash Incentive for Knitwear Sector and all categories of the first part (c) sub-part of FEPD Circular No. 34/2021<br><br>3.00%<br>3.00%<br>0.50% | 3.00%<br>3.00%<br>0.50% |
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