Regulatory Alerts2017-08-17
Added · Updated
FEPD Circular No. 31: Export subsidy/Cash incentive for financial year 2017-2018
The document establishes export subsidies and cash incentives for specific goods shipped between July 1, 2017, and June 30, 2018, assigning rates ranging from 2.00% to 20.00% across sectors including garments, agro-products, leather, and handicrafts. It introduces new cash incentives for software/IT/ES, synthetic footwear, ACs, accumulator batteries, and coconut coir products, while revising the value addition threshold for light engineering goods to 40% and updating dollar-based ceilings for leather item exports. All other directives from FEPD Circular No. 24 dated September 20, 2016, remain unchanged.
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:<br>(a) Ice coating rate for frozen shrimp export:<br>Up to 20%: 10.00%<br>Over 20%: Up to 30%: 9.00%<br>Over 30%: Up to 40%: 8.00%<br>Over 40%: 7.00%<br>(b) Ice coating rate for export of frozen other fish:<br>Up to 20%: 5.00%<br>Over 20%: Up to 30%: 4.00%<br>Over 30%: Up to 40%: 3.00%<br>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:<br>a) Diversified jute products (Diversified Jute Products)<br>b) Jute finished goods (Hessian, Sacking, and SBC)<br>c) Jute yarn (Yarn and Twine) | 20.00%<br>10.00%<br>5.00% |
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- 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.
- 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.
- 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
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