FEPD Circular No. 05: Export Subsidy Against Export of Accumulator Battery

Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka.
Ref. No. FEPD Circular No. 05
Date: February 08, 2018

To All Approved Dealers of Foreign Exchange Transactions.

Dear Sir,

Regarding the provision of export subsidy against the export of Accumulator Batteries.

Attention is drawn to all concerned regarding the subject matter mentioned above, informing that the Government has decided to provide subsidy against the export of 'A' class Accumulator Batteries (HS Code: 8507.10 and 8507.20) manufactured in the country to encourage export trade. This facility will be applicable for goods shipped from the 2017-2018 fiscal year. The following paragraphs outline the guidelines for Approved Dealer Banks to follow regarding the payment of subsidy:

2. Recipient of Subsidy and Amount of Entitlement: The manufacturer-exporter shall be entitled to a subsidy at the rate of 15% on the net FOB value against the export of Accumulator Batteries produced in their own factory. The aforementioned facility shall not be applicable for exports from establishments located in Special Areas (EPZs, EZs).

3. Level of Local Value Addition: In the case of export of Accumulator Batteries, a minimum of 30% local value addition percentage shall be applicable. The export subsidy and duty drawback/bond facility shall not be applicable simultaneously in the aforementioned sector.

4. Deadline for Submission of Export Subsidy Application:
   (a) The aforementioned subsidy shall be paid according to the DSR (Duty Refund Scheme Rules) against the expenses incurred for handling, quality inspection, processing of exported goods, and domestic and international transportation and freight charges. (b) Exporters may submit applications for subsidy in Form-C at the Approved Dealer Bank branch against returned export proceeds under export letters of credit/contracts prepared after export or through Documentary Collections. For exports against export letters of credit/contracts involving advance return of export price through TT (Telegraphic Transfer), the Approved Dealer Bank branch must ensure the authenticity/reliability of the foreign buyer, accuracy of price, and actual export from Bangladesh based on the TT advice and other documents. The advance payment through TT must be made directly through banking channels (excluding Exchange Houses) by the exporter or importer, and the TT advice must mention information related to the import. In all cases, the subsidy application must be submitted to the relevant Approved Dealer Bank branch within 180 days from the date of export price assessment (repatriation of export price) at the relevant bank abroad. Alongside, the instructions of FEPD Circular No. 12, dated December 20, 2012, shall be followed regarding the submission of subsidy applications for exports against different shipments under the same export. However, in cases where the time limit for submitting applications for the aforementioned facility has already expired, applications for the subsidy facility may be submitted within 60 (sixty) days from the date of issuance of this circular. (c) Required documents for export, such as the full set of Bill of Lading/Airway Bill issued and endorsed by the carrier as proof of shipment, Commercial Invoice, Packing List, Bill of Exporter (issued and examined by Customs authorities and endorsed by the carrier as proof of export), etc., must be submitted.

5. Receipt, Examination, and Payment Decision of Application by Approved Dealer Bank Branch:
   (a) The Approved Dealer Bank shall ensure in the initial examination that all documents, certificates, and endorsements mentioned in various sections of the export subsidy application form are complete and attached with the application. A certificate must be submitted along with the subsidy application according to the attached table (Form-B) from the Accumulator Battery Manufacturers and Exporters Association of Bangladesh. The relevant bank branch shall also ensure the authenticity of the documents processed by the bank branch and the accuracy of the information mentioned therein. The Approved Dealer Bank branch shall inform the applicant institution in writing within 03 (three) working days of receiving the application regarding any defect/incompleteness found in the initial examination. (b) To ensure consistency between the production capacity of the applicant institution and the export mentioned in the application, additional explanations/documents may be required from the applicant. The Approved Dealer Bank shall determine the payable amount after the application is completed and complete based on information/certificates collected from the bank branch's own records and other bank branches regarding export and export price repatriation. This process must be carried out by following the instructions in the designated section of the application form for use by the Approved Dealer Bank. (c) Each application must be inspected by an appointed External Audit Firm to ensure the accuracy of the amount payable according to the subsidy application. After conducting the inspection, the claim for payment of the amount payable for export subsidy shall be sent to the Accounts and Budgeting Department of the Head Office of Bangladesh Bank in Form-D through the Head Office of the Approved Dealer Bank. The statement of amount paid in favor of the applicant institution regarding the subsidy released by Bangladesh Bank shall be submitted to the Foreign Exchange Policy Department of the Head Office of Bangladesh Bank through the Head Office of the Bank in Form-E within the second week of the following month. (d) Along with the approval of subsidy payment in each case, the Export Price Repatriation Certificate (according to Appendix-5/23 of Volume-1 of Guidelines for Foreign Exchange Transactions-2009), Bill of Lading/Airway Bill as proof of shipment, Commercial Invoice, Packing List, and Bill of Exporter endorsed by Customs authorities must be stamped with the seal of the paid amount and signed by the authorized officer at an easily visible place to prevent misuse of these documents. The Approved Dealer Bank branch must take special care to ensure that a PR (Payment Receipt) is not issued multiple times for the same facility under the same export. Additionally, before processing the application, the Approved Dealer Bank must ensure that the export price of the relevant exporter has not remained unrepatriated by checking the Bangladesh Bank's Online Exporter
   Monitoring System according to the instructions of FEPD Circular No. 30, dated August 16, 2017. (e) All documents related to the decision of subsidy payment must be preserved at the branch for at least 03 (three) years from the date of payment for examination by the Audit/State Commercial Audit Department of Bangladesh Bank. (f) In case of any ambiguity regarding export or need for information collection, the relevant bank and Audit Firm shall consult the Export Promotion Bureau, TSCB Building, 1 Kawran Bazar, Dhaka.

6. Penal Measures for Illegal Payment of Subsidy:
   (a) If subsidy is paid illegally, the paid amount shall be recovered by closing the account of the paying bank maintained with Bangladesh Bank.
   (b) Appropriate penal measures shall be taken against the bank officers/employees involved in the committed irregularity.
   (c) If any officer of the Exporters Association is involved in the committed irregularity or assists in the irregularity by providing false information, appropriate penal measures shall be taken against the Exporters Association/officer.

7. Process of Payment of Amount for Subsidy: The amount shall be provided in favor of the relevant bank against the submitted application for subsidy from the fund released against the government budget allocation.

All concerned are requested to be informed about the matter.

Yours faithfully,

Enclosure: As per description.

(Md. Harun-Or-Rashid)
Deputy General Manager
Phone: 9530142

(Note: Refer to FEPD Circular No. 05/2018, Paragraph 04(b))

Form-'C'
Application for Export Subsidy Against Export of Accumulator Batteries

(a) Name and Address of Applicant Institution: ---------------------------------- Export Registration Certificate (ERC) Number: -----------------------------------------------

(b) Export Letter of Credit/Contract Number, Date and Price ------------------------------------- (Must submit a legible certified copy)

(c) Source, Quantity and Value of Products Used in Producing Exported Goods:
Supplier's Name and Address | Quantity | Value 1 | 2 | 3

(Must submit endorsement from Accumulator Battery Manufacturers and Exporters Association of Bangladesh regarding description, value, and source of exported goods.)

(d) Imported Ancillary Materials Used in Producing Exported Goods:
Supplier's Name and Address | Name and Quantity of Product | LC/Back-to-Back LC/Documentary Collection Number, Date | Value 1 | 2 | 3 | 4

(Must submit legible certified copy of LC in column 3. Must submit a declaration by the exporter that bond facility for duty has not been availed/utilized for materials used in the production process/duty drawback facility has not been taken and no application will be made in the future.)

(e) Details of Export Shipment:
Description of Product | Quantity | Name of Importer's Country | Invoice Price (Foreign Currency) | Date of Shipment | EXPI Number | Repatriated Export Price (Foreign Currency) and Date of Repatriation 1 | 2 | 3 | 4 | 5 | 6 | 7

(Must submit legible certified copies of Commercial Invoice, Packing List, Bill of Lading/Airway Bill issued and endorsed by the carrier as proof of shipment, Bill of Exporter (issued and examined by Customs authorities and endorsed by the carrier as proof of export), full set, etc., and Export Price Repatriation Certificate.)

(f) Amount Applied for Subsidy:
Amount of Ship Hire (if applicable for repatriated export price) | Commission, Insurance, etc. Payable in Foreign Currency (if any) | Net FOB Export Price 1-(2+3) | 1 | 2 | 3 | 4

(Must submit legible certified copy of Freight Surcharge mentioning ship hire, if applicable)

Rate of Local Value Addition based on Value of Products Used in Producing Exported Goods [(4-6)/4] * 100

Entitled Subsidy*
4 * 15%
Domestic Product | Imported Product
5 | 6 | 7 | 8

(*Subsidy shall be entitled if the rate in column 7 is consistent with Paragraph 3 of the aforementioned circular.)

I hereby declare that, an application for subsidy is made against the export of 'A' class Accumulator Batteries produced in our own factory. All information/declarations provided in this application are complete and correct. If any error/false information/fraud/forgery is discovered later, the entire amount or part thereof of the subsidy received shall be recovered from me/us and/or from my/our bank account.

Date: --------------------- ---------------------------------- Signature and Designation of Owner/Authorized Officer of Applicant Institution.

(g) To be filled by the Subsidy Providing Bank Branch:
Amount of Ship Hire (if applicable for repatriated export price) | Commission, Insurance, etc. Payable in Foreign Currency (if any) | Net FOB Export Price 1-(2+3) | 1 | 2 | 3 | 4

(Must submit legible certified copy of Freight Surcharge mentioning ship hire, if applicable)

Rate of Local Value Addition based on Value of Products Used in Producing Exported Goods [(4-6)/4] * 100

Amount of Payable Subsidy (in Taka)*
Domestic Product | Imported Product
4 * 15% * | 5 | 6 | 7 | 8

(*Subsidy shall be entitled if the rate in column 7 is consistent with Paragraph 3 of the aforementioned circular.)

Amount of Subsidy --------------- Taka (In words: -----------------).
Date of Payment: --------------------

Signature, Name and Designation of Authorized Bank Officer for Subsidy Approval

(Related to Date of Export Price Repatriation) (Exchange Rate for Purchase of Foreign Currency at OD Site) (Foreign Currency) | (Foreign Currency) | (Foreign Currency)

(Note: Refer to Paragraph 05(c), FEPD Circular No. 05/2018)

Form - 'B'
Endorsement Certificate Issued by Accumulator Battery Manufacturers and Exporters Association of Bangladesh

Endorsement Certificate for Receiving Export Subsidy Against Export of Accumulator Batteries

1. Name, ERC Number and Address of Applicant:
2. Export Letter of Credit/Contract Number: Date: Price:
3. Name and Address of Foreign Buyer:
4. Name and Address of Foreign Buyer's Bank:
5. (a) Invoice Number: Date:
   (b) Quantity of Goods Mentioned in Invoice: Price:
6. Source of Local Materials Used in Exported Accumulator Batteries (Name and Address of Supplier): Quantity: Price:
7. Source of Imported Ancillary Materials Used in Exported Accumulator Batteries (Name and Address of Supplier): Quantity: Price:
8. Description of Exported Goods: Quantity: Price:
9. Date of Shipment: Destination Port:
10. EXPI Number: Price: Date:
11. Total Repatriated Export Price (Foreign Currency): Net FOB Export Price (Foreign Currency):
12. Certificate Number of Repatriated Export Price: Date:

Signature and Date of Exporter

Hereby certify that, the information mentioned in the aforementioned paragraphs is correct and reliable regarding the application for subsidy against the export of Accumulator Batteries manufactured in our own factory by sourcing materials from the sources mentioned in serial numbers 6 and 7 above. The authenticity/reliability of the purchase order of the foreign buyer/importer has also been ensured.

Signature and Date of Exporter

It is verified that the above declaration of the exporter is correct. The declared export price in serial number 8 is found consistent with the actual and prevailing international market price, and the authenticity/reliability of the foreign buyer has also been ensured. It is recommended to pay export subsidy on the repatriated export price (Net FOB Price).

Signature, Date and Seal of Two Authorized Officers of Accumulator Battery Manufacturers and Exporters Association of Bangladesh

[If any rubbing, cutting or correction is made, this endorsement shall be considered void.]

Form-'D'
(Refer to Paragraph 5(g), FEPD Circular No. 05/2018)

Claim Proposal for Amount Payable for Export Subsidy in Accumulator Battery Export Sector According to FEPD Circular No. 05/2018

.............................................. Bank, Head Office, Dhaka.

Subsidy

Name and Address of Applicant Institution | Date of Application Receipt by Branch | Amount Applied | Amount of Claim Payable | Description of Goods | Date of Shipment and Destination | EXPI Number | Total Repatriated Export Price (Foreign Currency) | Net FOB Price (Foreign Currency) | Date of Price Repatriation 1 | 2 | 3 | 4 | 5 | 6 | 6 | 7 | 8 | 9

Official Seal, Signature, Date, Name and Designation of Authorized Bank Officer

Form-'E'
(Refer to Paragraph 05(g), FEPD Circular No. 05/2018)

Statement of Paid Subsidy for the Month of......... of the Year......... in Accumulator Battery Export Sector According to FEPD Circular No. 05/2018

Name of Approved Dealer Bank Branch:..............................................................................

Subsidy

Name and Address of Applicant Institution | Paid Subsidy (Taka) | Date of Payment | Pending Applications at Branch | Description of Goods | Date of Shipment and Destination | EXPI Number | Total Repatriated Export Price (Foreign Currency) | Net FOB Price (Foreign Currency) | Number | Claimed Amount (Taka) 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10

---

Official Seal, Signature, Name, Designation and Date of Authorized Officer