FEPD Circular No. 13: Cash incentive against export of Furniture

Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka. Ref. No. FEPD Circular No. 13 Date: April 11, 2016

To All Authorized Dealers in Foreign Exchange Transactions.

Dear Sirs,

Regarding the provision of export incentives against the export of furniture.

The attention of all concerned is drawn to the subject cited above, informing that the Government has decided to provide incentives against the export of furniture to encourage the country's export trade. This facility will be applicable to goods shipped from the date of issuance of this circular. The following paragraphs outline the guidelines to be followed by authorized dealer banks regarding the payment of incentives:

2. Recipient of the incentive and extent of entitlement: In the case of furniture produced and exported from own factories, the manufacturer-exporter shall be entitled to an incentive at the rate of 15% on the net FOB value. However, it is to be noted that no duty drawback facility shall be availed for the production of furniture. Furthermore, this facility shall not be applicable to institutions located in EPZ areas that have received bond facility against the export of furniture.

3. Deadline for submission of application for export incentive: (a) The aforementioned incentive shall be paid in accordance with the Duty Drawback Rules against the expenses incurred for handling, inspection, processing of exported goods, and domestic and international transportation and freight charges. (b) Exporters may submit applications for export incentives in Form 'K' at the authorized dealer bank branch against repatriated export proceeds under exported letters of credit/contracts or through documentary collection. For exports against letters of credit/contracts with advance repatriation of export value through TT, the authorized dealer bank branch must ensure the authenticity/reliability of the foreign buyer, correctness of value, and genuine export from Bangladesh based on the TT cancellation comment and other documents. Advance payment of value through TT must be made directly through banking channels (excluding exchange houses) by the exporter or importer, and the TT cancellation comment must mention information related to the import. In all cases, the incentive application must be submitted to the concerned authorized dealer bank branch within 180 days from the date of export value assessment (repatriation of export value) as the reference account of the concerned bank abroad. (c) Documents required for export, such as Bill of Lading/Air Waybill as proof of shipment, Commercial Invoice, Packing List, Bill of Exporter issued by Customs (along with the 2nd page of the Bill of Exporter), etc., must be submitted.

4. Receipt, verification, and payment decision of application by authorized dealer bank branch: (a) The authorized dealer bank must ensure in the primary verification that all documents, certificates, and vouchers mentioned in various paragraphs of the export incentive application form are attached with the application in complete and full form. A certificate must be submitted along with the incentive application in accordance with the attached table (Form 'B') from the Bangladesh Furniture Exporters Association. The concerned bank branch must also ensure the authenticity of the documents processed by the bank branch and the accuracy of the information stated therein. If any error/incompleteness is found during primary verification (if any), the authorized dealer bank branch must inform the applying institution in writing within 03 (three) working days of receiving the application.

-2- (b) To ensure consistency between the production capacity of the applying institution and the export mentioned in the application, additional explanations/information may be required from the applicant, and information/certificates collected from the bank branch's own records or other bank branches may be attached. After the application form is obtained in complete and full form, the authorized dealer shall determine the amount payable. This process must be completed by following the instructions in the section designated for use by the authorized dealer bank branch of the concerned application form sequentially. (c) Each application must be inspected by the appointed external audit firm for the correctness of the amount payable according to the incentive application. After conducting the inspection, the claim for payment of the amount payable as export incentive must be sent to the Accounts and Budgeting Department of the Head Office of Bangladesh Bank via the Head Office of the authorized dealer bank in Form 'G'. The statement of amount paid in favor of the applying institution in respect of incentives issued by Bangladesh Bank must be submitted to the Foreign Exchange Inspection Department of the Head Office of Bangladesh Bank via the Head Office of the bank in Form 'D' during the second week of the following month. (d) In each case, along with the approval of incentive payment, the seal of the paid incentive amount and the signature of the authorized officer must be placed on the export proceeds repatriation certificate (according to Appendix-5/23), Bill of Lading/Air Waybill as proof of shipment, Commercial Invoice, Packing List, and Bill of Exporter certified by Customs, at a place easily visible, so that there is no scope for misuse of those documents. The authorized dealer bank branch must take special care to ensure that a PRC is not issued multiple times for the same export for the same facility. Additionally, the authorized dealer bank must ensure that the export proceeds of the concerned exporter have not remained unrepatriated in accordance with the instructions of FEPD Circular-31, dated December 27, 2001, from the Bangladesh Bank Online Exporter Monitoring System. (e) All documents related to the decision of incentive payment must be preserved at the branch for at least 03 (three) years from the date of payment for inspection by the Bangladesh Bank Inspection/Government Commercial Audit Department. (f) If any ambiguity arises regarding export or information is needed, the concerned bank and audit firm shall seek advice from the Export Promotion Bureau, TSC Building, 1 Karwan Bazar.

5. Punitive measures for irregular payment of incentive: (a) If incentive is paid irregularly, the paid amount shall be recovered by closing the account of the paying bank kept with Bangladesh Bank. (b) Appropriate punitive measures shall be taken against the bank officials/officers 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 punitive measures shall be taken against the Exporters Association/officer.

6. Process of payment of amount for incentive: The amount shall be provided in favor of the concerned bank against the submitted application for incentive from the funds released against the government budget allocation.

All concerned parties are requested to be informed of this matter.

Yours faithfully,

Enclosure: As per description.

(Md. Zakir Hossain Chowdhury) Deputy General Manager Phone: 9530250

(Note: See FEPD Circular No. 13/2016, Paragraph 03(b))

Form 'K' Application for Incentive against Export of Furniture

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

(b) Export Letter of Credit/Contract Number, Date and Value ------------------------------------- (A legible certified copy must be submitted)

(c) Local sourcing source, quantity and value of materials used in the production of exported goods: Name and Address of Supplier Quantity Value 1 2 3 (A certificate from the Bangladesh Furniture Exporters Association regarding the description, value, and sourcing of the exported goods must be submitted.)

(d) Sourcing of imported materials used in the production of exported goods: Name and Address of Supplier Name and Quantity of Goods Letter of Credit/Back to Back Letter of Credit/Documentary Collection Number, Date Value 1 2 3 4 (A legible certified copy of the Letter of Credit in column 3 must be submitted. A declaration by the exporter stating that bond facility or duty drawback facility has not been availed for the materials used in the production process and will not be applied for in the future must be submitted.)

(e) Details of Export Shipment: Description of Goods Quantity Name of Importer's Country Invoice Value (In Foreign Currency) Date of Shipment EXPI Number Repatriated Export Value and Date of Repatriation (In Foreign Currency) 1 2 3 4 5 6 7 (Legible certified copies of Commercial Invoice, Packing List, Bill of Lading/Air Waybill as proof of shipment, Bill of Exporter issued by Customs (along with the 2nd page of the Bill of Exporter), etc., and the export proceeds repatriation certificate must be submitted.)

(f) Amount of Incentive Applied: Repatriated Export Value Amount of Ship Hire (if applicable) Commission, Insurance, etc. payable in Foreign Currency (if any) Net FOB Export Value 1-(2+3) Payable Incentive 15 4 ------- 100 1 2 3 4 5 (A legible certified copy of the Freight Surcharge containing the mention of ship hire (if applicable) must be submitted.)

I hereby declare that an application for incentive has been made against the export of furniture produced in our own factory. All information/declarations provided in this application are complete and correct. If any wrong/false information/fraud/forgery is discovered later, the entire amount of the incentive taken or any part thereof shall be recovered from me/us and/or from my/our bank account.

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

(g) To be filled by the Incentive Providing Bank Branch: Repatriated Export Value (In Foreign Currency) Total Deduction for Commission, Insurance and Ship Hire payable in Foreign Currency (if applicable) Net FOB Export Value 1-2 Amount of Incentive Payable (In Taka): 15 3 --------- 100 1 2 3 4 Amount of Incentive --------------- Taka (In Words: -----------------). Date of Payment: --------------------

Signature, Name and Designation of the Authorized Bank Officer for Incentive Approval (On the date of export proceeds repatriation OTC Buy Rate of the concerned Foreign Currency)

(Note: See FEPD Circular No. 13/2016, Paragraph 04(a))

Form - 'B' Certificate of Verification Issued by Bangladesh Furniture Exporters Association

Certificate of Verification for Receiving Export Incentive against Export of Furniture

1. Name, ERC Number and Address of the Applicant:
2. Export Letter of Credit/Contract Number: Date: Value:
3. Name and Address of Foreign Buyer:
4. Name and Address of Foreign Buyer's Bank:
5. (a) Invoice Number: Date: (b) Quantity and Value of Goods mentioned in the Invoice:
6. Sourcing of Local Materials for the Production of Exported Furniture (Name and Address of Supplier): Quantity: Value:
7. Sourcing of Imported Materials for the Production of Exported Furniture (Name and Address of Supplier): Quantity: Value:
8. Details of Exported Goods: Quantity: Value:
9. Date of Shipment: Destination Port:
10. EXPI Number: Value: Date:
11. Total Repatriated Export Value (In Foreign Currency): Net FOB Export Value (In Foreign Currency):
12. Certificate Number of Repatriated Export Value: Date: Signature and Date of Exporter

Hereby it is certified that the information mentioned in the aforementioned paragraphs is correct and reliable for the purpose of export incentive against the export of furniture by sourcing materials from the sources mentioned in serial numbers 6 and 7 above through the production of furniture in our own factory. The authenticity/reliability of the purchase order of the foreign buyer/importer has also been ensured.

Signature and Date of Exporter

It has been verified that the exporter's above declaration is correct. The declared export value mentioned in serial number 8 is found to be reasonable and consistent with the current domestic market price, and the authenticity/reliability of the foreign buyer has also been ensured. Payment of export incentive on the repatriated export value (Net FOB Value) is recommended.

Signature, Date and Seal of Two Suitable Officers of Bangladesh Furniture Exporters Association

[Any erasure, cutting, or correction shall render this certificate void.]

Form-'G' (Note: See Paragraph 4(c), FEPD Circular No.-13/2016)

According to FEPD Circular No.-13/2016 Claim Proposal for Amount Payable as Export Incentive in the Furniture Export Sector

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

Name and Address of the Incentive Applying Institution Export Related Information 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 Value (Foreign Currency) Net FOB Value (Foreign Currency) Date of Value Repatriation 1 2 3 4 5 6 6 7 8 9 Official Seal Signature, Date, Name and Designation of Authorized Bank Officer

Form-'D' (Note: See Paragraph 04(g), FEPD Circular No.-13/2016)

According to FEPD Circular No.-13/2016 Statement of Paid Amount as Export Incentive in the Furniture Export Sector for the Month of.......... of the Year.........

Name of Authorized Dealer Bank Branch:..............................................................................

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

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