FEPD Circular No. 24: Export subsidy/Cash incentive for financial year 2016-2017

Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka.
Ref. No. FEPD Circular No. 24 Date: ------------------- 05 Ashwin, 1423

To all Approved Dealers engaged in Foreign Exchange transactions.

Regarding the provision of Export Subsidy/Cash Incentive against exports in the ongoing 2016-2017 fiscal year.

To encourage the export trade of the country, the Government has decided to provide export subsidy/cash incentive in certain product export sectors for the ongoing 2016-2017 fiscal year. In light of this decision, export subsidy/cash incentive will be payable at the rates mentioned below per Taka against the export of the following goods shipped during the period from July 01, 2016 to June 30, 2017:

Name of Export Product | Applicable Rate
01. Cash incentive as an alternative to Bond and Duty Drawback in the export-oriented domestic garment sector | 4.00%
02. Additional benefit for small and medium industries in the garment sector (under existing rules) | 4.00%
03. Special additional assistance for garment exporters in the Euro area over the existing 4% | 2.00%
04. New product/New market (garment sector) expansion assistance (excluding USA/Canada/EU) | 3.00%
05. Cash incentive in the export sector of hand-made products made using coir, jute, sugarcane bagasse, etc. | 15.00%
06. Export subsidy in the export sector of agricultural products (vegetables/fruits) and processed (agro-processing) agricultural products | 20.00%
07. Export subsidy in the export sector of light engineering products | 15.00%
08. Export subsidy in the export sector of 100% Halal meat | 20.00%
09. Cash incentive in the export sector of frozen shrimp and other fish:
(a) Ice coating rate for frozen shrimp export
Ice: 20% | 10.00%
Ice: 20%-30% | 9.00%
Ice: 30%-40% | 8.00%
Ice: above 40% | 7.00%
(b) Ice coating rate for other fish
Ice: 20% | 5.00%
Ice: 20%-30% | 4.00%
Ice: 30%-40% | 3.00%
Ice: above 40% | 2.00%
10. Cash incentive in the export sector of leather goods | 15.00%
11. Export subsidy against ship export | 10.00%
12. Cash incentive in the potato export sector | 10.00%
13. Export subsidy against PET bottle-flake export | 10.00%
14. Export subsidy against furniture export | 15.00%
15. Export subsidy against plastic goods export | 10.00%
16. Cash subsidy in the jute goods export sector:
a) Diversified jute products (Diversified Jute Products) | 20.00% b) Jute finished goods (Hessian, Sacking and SBC) | 7.50% c) Jute yarn | 5.00%
17. Export subsidy against export of 'Crust' and 'Finished' leather from industries relocated to Savar Leather City | 5.00%
18. Export subsidy against export of cow/buffalo hide, tripe, horn and skin (excluding bone) * | 10.00%
19. Export subsidy against export of seeds of grains and vegetables * | 20.00%
20. Export subsidy against export of carbon produced from jute stick * | 20.00%

• Cash incentive will be available in the identified sectors from the date of issuance of the relevant circular.

Continued - Page - 02

2. The definition of small and medium industries in the garment sector in FEPD Circular No. 12, dated June 07, 2010, is hereby redefined as follows:
   "Those manufacturing-exporter establishments that will export garments/garment products worth up to 3.50 million US Dollars in any fiscal year starting from (2016-2017 fiscal year) and are not owned by any large industrial establishment will be defined as small and medium garment industries in the subsequent fiscal year."

3. If a recipient of cash incentive in the garment sector is eligible for cash incentive in three categories (existing rule cash incentive 4%, additional benefit for small and medium industries 4%, and new product/new market expansion assistance 3%) against the same export, the maximum cash incentive will be 10% instead of 11%.

4. In the case of submitting application forms for the benefits listed in serial numbers 1, 2, and 3 above, the following instructions shall be followed:
   (a) Small and medium establishments in the garment sector: An application for cash incentive shall be submitted at the rate of 8% (4%+4%) for the existing cash incentive applicable against exports and the additional benefit applicable for small and medium industries. In case the said export is carried out in the Euro area, an application for cash incentive shall be submitted at the rate of 10% (4%+4%+2%). (b) Establishments other than those mentioned in (a) above: In case the export program is carried out in the Euro area, an application for cash incentive shall be submitted at the combined rate of 6% (4%+2%) along with the existing cash incentive and the 2% assistance applicable for the Euro area.

5. Under FEPD Circular No. 21, dated November 09, 2010, and FEPD Circular No. 22, dated November 20, 2011, the application forms of member establishments of the Bangladesh Terry Towel & Linen Manufacturers & Exporters Association (BTTLMEA) shall be submitted along with the certification certificate of the said Association (in accordance with Form-D of FEPD Circular No. 21/2010).

6. In accordance with the instructions of FEPD Circular No. 23, dated November 22, 2009 (Finished Leather) and FEPD Circular No. 05, dated April 11, 2010 (Crust Leather) and other circulars issued on this subject, an application for the subsidy mentioned in serial number 17 of the above list shall be submitted. The said two products must be mentioned in the certification certificate issued by the relevant Association of industries producing them in industries relocated to Savar Leather City.

All other relevant instructions of all FEPD Circulars/circular letters regarding the provision of export subsidy/cash incentive shall remain unchanged.

All concerned parties are requested to take note of this.

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