FEPD Circular No. 31: Export subsidy/Cash incentive for financial year 2017-2018

Foreign Exchange Policy Department
Bank of Bangladesh
Head Office
Dhaka
Ref. No. FEPD Circular No. 31 Date: ----------------- August 17, 2017 To All Approved Dealers engaged in Foreign Exchange Transactions.

Regarding the provision of Export Subsidy/Cash Incentive against exports for the fiscal year 2017-2018.

To encourage the country's export trade, the government has decided to provide export subsidy/cash incentive for certain product export sectors in the ongoing fiscal year 2017-2018. Accordingly, export subsidy/cash incentive will be payable at the rates specified below per Taka for the following goods exported between July 01, 2017, and June 30, 2018:

S. No	Name of Export Product	Applicable Rate
1.	Cash incentive as an alternative to Bond and Duty Draw-back in the export-oriented domestic garment sector	4.00%
2.	Additional benefit for small and medium industries in the garment sector (existing rules)	4.00%
3.	New product/new market (garment sector) expansion assistance (excluding USA/Canada/EU)	3.00%
4.	Special additional assistance for garment exporters in the Euro region over the existing 4%	2.00%
5.	Cash incentive for export of hand-made products made from jute, coir, sugarcane bagasse, etc.	20.00%
6.	Export subsidy for export of agricultural products (vegetables/fruits) and processed (agro-processing) agricultural products	20.00%
7.	Export subsidy against export of cattle/buffalo hide, skin, horn, and hooves (excluding bone)	10.00%
8.	Export subsidy for export of light engineering products	15.00%
9.	Export subsidy for export of 100% Halal meat	20.00%
10.	Cash incentive for export of frozen shrimp and other fish:; (a) Ice coating rate for frozen shrimp export:; Up to 20%: 10.00%; Over 20%: Up to 30%: 9.00%; Over 30%: Up to 40%: 8.00%; Over 40%: 7.00%; (b) Ice coating rate for export of frozen other fish:; Up to 20%: 5.00%; Over 20%: Up to 30%: 4.00%; Over 30%: Up to 40%: 3.00%; Over 40%: 2.00%
11.	Cash incentive for export of leather goods	15.00%
12.	Export subsidy against export of 'Raw' and 'Finished' leather from industries relocated to Savar Leather Industrial City	10.00%
13.	Export subsidy against export of ships	10.00%
14.	Cash incentive for export of potatoes	20.00%
15.	Export subsidy against export of PET bottle-flakes	10.00%
16.	Export subsidy against export of furniture	15.00%
17.	Export subsidy against export of seeds of grains and vegetables	20.00%
18.	Export subsidy against export of carbon produced from jute stick	20.00%
19.	Export subsidy against export of plastic goods	10.00%
20.	Export subsidy against export of paper and paper products produced in the country	10.00%
21.	Export subsidy against export of agar and attar	20.00%
22.	Cash subsidy for export of jute goods:; a) Diversified jute products (Diversified Jute Products); b) Jute finished goods (Hessian, Sacking, and SBC); c) Jute yarn (Yarn and Twine)	20.00%; 10.00%; 5.00%

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2. In addition to the aforementioned products, it has been decided to provide cash incentives for the following export products starting from the fiscal year 2017-18:

S. No	Name of Export Product	Applicable Rate
1.	Cash incentive against export of Software, ITES (Outsourcing) and Hardware from Bangladesh	10.00%
2.	Cash incentive against export of footwear made of synthetic and fabric mix	15.00%
3.	Cash incentive against export of Air Conditioners (AC)	20.00%
4.	Cash incentive against export of Accumulator Batteries (HS Code: 8507.10 and 8507.20)	15.00%
5.	Cash incentive against export of products produced from coconut coir	20.00%

Cash incentives can be availed from the date of issuance of this circular for the above-mentioned product exports.

3. Furthermore, regarding the provision of export subsidy/cash incentive for certain sectors of shipped products in the fiscal year 2017-18, the following matters will be included/amended:

a) In the case of providing export subsidy against export of light engineering products, the threshold of value addition of more than 50% will be changed to value addition of more than 40%.

b) The ceiling limits for export of leather goods will be redefined at the following rates:

S. No	Name of Export Product	Ceiling in Dollars
1.	Bags (Handbags)	45.00
2.	Boots and Footwear (Footwear)	35.00
3.	Sandals (Sandals)	20.00
4.	Handbags (Handbags)	30.00
5.	Vanity Bags (Vanity)	35.00
6.	Belts (Belts)	25.00

Note: In case of HS Code or product description where it is not possible to identify which ceiling the product falls under for the same type of product, the cash incentive shall be calculated based on the lower ceiling limit.

4. All other relevant instructions of all FEPD Circulars/Circular Letters applicable with the percentages mentioned in FEPD Circular No. 24, dated September 20, 2016, shall remain unchanged in the provision of export subsidy/cash incentive.

All concerned parties are requested to take note of this.

Yours faithfully,

(Md. Abdul Mannan)
Deputy General Manager
Phone: 9530319