FEPD Circular No. 34: Export Subsidy Against Export of Photovoltaic Modules

Foreign Exchange Department Bangladesh Bank Head Office Dhaka. Ref. No. FEPD Circular No. 34 All Approved Dealers of Foreign Exchange Transactions.

Dear Sir,

Context of Export Subsidy Against Export of Photovoltaic Modules.

It is brought to the notice of all concerned regarding the subject matter that the Government has decided to provide an export subsidy against the export of domestically produced Photovoltaic Modules to encourage the country's export trade. This facility will be applicable for goods shipped during the fiscal year 2018-2019. The following paragraphs outline the guidelines to be followed by Approved Dealer Banks regarding the payment of subsidies:

02. Recipient of Subsidy and Extent of Entitlement: In the case of exporting Photovoltaic Modules manufactured in own factories, the manufacturer-exporter will be entitled to a subsidy at the rate of 10% on the net FOB value. This facility will not be applicable for exports from establishments located in Special Areas (EPZ, EZ).

03. Extent of Local Value Addition: In the case of exporting Photovoltaic Modules, the rate of local value addition must be at least 30%. The export subsidy and Duty Draw-back/Customs Bond facility will not be applicable simultaneously in the said sector.

04. Deadline for Submission of Export Subsidy Application:

(a) The aforementioned subsidy will be paid against the expenses incurred for handling, quality inspection, processing of exported goods, and domestic and international transportation and freight charges, in accordance with the Foreign Exchange (Export Subsidy) Rules, 2018.

(b) Exporters may submit applications for export subsidy in Form-C at the branch of the Approved Dealer Bank against the repatriation of export proceeds generated through documents prepared after the export under the Export Letter of Credit/Contract or through Documentary Collection. For exports against advance repatriation of export price under a Letter of Credit/Contract stipulating advance repatriation through TT, the branch of the Approved Dealer Bank must ensure the authenticity/reliability of the foreign buyer, correctness of price, and genuine export from Bangladesh based on the TT cancellation statement and other documents. Advance payment of price through TT must be made directly through banking channels (excluding Exchange Houses) by the exporter or importer, and the TT cancellation statement must mention information related to the import. In all cases, the application for subsidy must be submitted to the concerned branch of the Approved Dealer Bank within 180 days from the date of assessment of export price (repatriation of export price) in the relevant bank's account abroad. However, regarding the submission of applications for subsidy against exports through different shipments of the same export, the instructions of FEPD Circular No. 12, dated December 20, 2012, will be followed.

(c) Documents required for export, such as the full set of Bill of Lading/Air Waybill 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 for export), etc., must be submitted.

05. Receipt, Examination, and Payment Decision of Application by Approved Dealer Bank Branch:

(a) The Approved Dealer Bank must 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 in accordance with Form-B attached by the Solar Module Manufacturers Association of Bangladesh must be submitted with the export subsidy application. The concerned bank branch must also ensure the authenticity of documents processed by the bank branch and the accuracy of the information mentioned therein. If any discrepancy/incompleteness is found during the initial examination, the Approved Dealer Bank branch must inform the applying establishment in writing within 03 (three) working days of receiving the application.

(b) To ensure consistency between the production capacity of the applying establishment 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 to the application. After the application is received in complete and full form, the Approved Dealer Bank will determine the amount payable as subsidy. This process will be completed by following the instructions in the section designated for use by the Approved Dealer Bank branch in the concerned application form sequentially.

(c) Each application must be inspected by an appointed external audit firm to ensure the correctness of the amount payable according to the subsidy application. After conducting the inspection, the claim for the amount payable as export subsidy must 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. In respect of the subsidy released by Bangladesh Bank, the details of the amount paid in favor of the applying establishment must 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, a seal of the amount of subsidy paid and the signature of the authorized officer must be placed on the export proceeds repatriation certificate (Appendix-5/36 of Guidelines for Foreign Exchange Transactions-2018, Volume-1), Bill of Lading/Air Waybill as proof of shipment, Commercial Invoice, Packing List, and Bill of Exporter endorsed by Customs authorities, in a place easily visible, so that there is no scope for misuse of those documents. The Approved Dealer Bank branch must take special care that a PRS is not issued more than once for the same facility under the same export. Additionally, before processing the application, the Approved Dealer Bank must ensure from the Bangladesh Bank's Online Exporter Monitoring System that the export proceeds of the concerned exporter have not been unrepatriated, in accordance with 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 inspection by the Bangladesh Bank's Audit/State Commercial Audit Department.

(f) If any ambiguity arises regarding export or information is needed to be collected, the concerned bank and audit firm will seek advice from the Export Promotion Bureau, TSCB Building, 1 Kawran Bazar, Dhaka.

06. Punitive Measures for Illegal Payment of Subsidy:

(a) If subsidy is paid illegally, the paid amount will be recovered by debiting the account of the paying bank maintained with Bangladesh Bank.

(b) Appropriate punitive measures will 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 punitive measures will be taken against the Exporters Association/officer.

07. Process of Payment of Amount for Subsidy: The amount will be provided in favor of the concerned bank against the submitted application for subsidy from the funds released against the government budget allocation.

All concerned parties are requested to be informed about the matter.

Yours faithfully,

Enclosure: As per description.

(Md. Harun-Or-Rashid) Deputy General Manager Phone: 9530625

(Note: See FEPD Circular No. 34/2018, Paragraph 04(b))

Form-'C' Application for Export Subsidy Against Export of Photovoltaic Modules

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

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

(c) Source, Quantity and Value of Products Used in Producing Exported Goods:

S.No	Name and Address of Supplier	Quantity	Value	Payment Method
1
2
3
4

(Must submit endorsement from the Solar Module Manufacturers Association of Bangladesh regarding the description, value, and source of exported goods. Must submit necessary documents in favor of the payment method.)

(d) Imported Materials Used in Producing Exported Goods:

S.No	Name and Address of Supplier	Name and Quantity of Product	LC/Back-to-Back LC/Documentary Collection Number, Date	Value
1
2
3
4

(Must submit a legible certified copy of the LC in column 3. Must submit a declaration by the exporter that Customs Bond facility or Duty Draw-back facility has not been availed for materials used in the production process and will not be applied for in the future [subject to Ministry's decision].)

(e) Details of Export Shipment:

S.No	Description of Product	Quantity	Name of Importer's Country	Invoice Value (Foreign Currency)	Date of Shipment	EXPI Number	Repatriated Export Value (Foreign Currency) and Date of Repatriation
1
2
3
4

(Must submit legible certified copies of Commercial Invoice, Packing List, full set of Bill of Lading/Air Waybill issued and endorsed by the carrier as proof of shipment, Bill of Exporter (issued and examined by Customs authorities and endorsed by the carrier for export), and export proceeds repatriation certificate.)

(f) Amount Applied for Subsidy:

S.No	Description	Amount
1	Ship Hire Amount (if applicable for repatriated export value)
2	Commission, Insurance, etc. payable in Foreign Currency (if any)
3	Net FOB Export Value (1 - (2+3))
4	Value of Products Used in Producing Exported Goods
5	Domestic Products
6	Imported Products
7	Local Value Addition Rate [(4-6)/4] x 100
8	Entitled Subsidy (4 x 10%)

(Must submit a legible certified copy of the Freight Surcharge containing the mention of ship hire, if applicable.)

(7th column rate will be entitled for subsidy subject to consistency with Paragraph 3 of the said Circular. If imported products are unused or previously imported products are used, the relevant production cost calculation must be mentioned in column 6 above. Must submit production cost calculation for this matter.)

I hereby declare that I have applied for export subsidy against the export of Photovoltaic Modules manufactured 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 of subsidy taken or a part thereof will be recovered from me/us and/or from my/our bank account.

Date: --------------------- Signature and Designation of Owner/Authorized Officer of Applying Establishment: ----------------------------------

(g) To be filled by the Bank Branch Providing Subsidy:

S.No	Description	Amount
1	Ship Hire Amount (if applicable for repatriated export value)
2	Commission, Insurance, etc. payable in Foreign Currency (if any)
3	Net FOB Export Value (1 - (2+3))
4	Value of Products Used in Producing Exported Goods
5	Domestic Products
6	Imported Products
7	Local Value Addition Rate [(4-6)/4] x 100
8	Payable Subsidy Amount (in Taka) (4 x 10% x)

(7th column rate will be entitled for subsidy subject to consistency with Paragraph 3 of the said Circular.)

Amount of Subsidy --------------- Taka (In words: -----------------). Date of Payment: -------------------- Signature, Name and Designation of Authorized Bank Officer for Subsidy Approval: ---------------------------------------- (Relevant Foreign Exchange ODI Site Purchase Price on the date of repatriation of export proceeds)

(Note: See FEPD Circular No. 34/2018, Paragraph 05(a))

Form - 'B' Endorsement Certificate Issued by Solar Module Manufacturers Association of Bangladesh

Endorsement Certificate for Receiving Export Subsidy Against Export of Photovoltaic Modules

1. Name, ERC Number and Address of 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 Products Mentioned in Invoice:
6. Source of Local Materials for Producing Exported Photovoltaic Modules (Name and Address of Supplier): Quantity: Value:
7. Source of Imported Materials Used in Producing Exported Photovoltaic Modules (Name and Address of Supplier): Quantity: Value:
8. Details of Exported Products: Quantity: Value:
9. Date of Shipment: Destination Port:
10. EXPI Number: Value: Date:
11. Total Repatriated Export Value (Foreign Currency): Net FOB Export Value (Foreign Currency):
12. Certificate Number of Repatriated Export Value: Date:

Signature and Date of Exporter:

Hereby, it is confirmed that the information mentioned in the above paragraphs is correct and reliable regarding the procurement of materials from the sources mentioned in serial numbers 6 and 7 for the export of Photovoltaic Modules manufactured 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 is verified that the declared export value mentioned in serial number 8 is genuine and consistent with the current 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 value (Net FOB Value).

Signatures, Date and Seal of Two Suitable Officers of Solar Module Manufacturers Association of Bangladesh:

[This endorsement will be considered void if any erasure, cutting, or correction is made.]

Form-'D' (See Paragraph 5(c), FEPD Circular No. 34/2018)

Claim Proposal for Amount Payable as Export Subsidy in the Sector of Export of Photovoltaic Modules in Accordance with FEPD Circular No. 34/2018

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

S.No	Name and Address of Subsidy Applying Establishment	Date of Receipt of Application by Branch	Amount Applied	Claim Amount Payable	Details of Product	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
7
8
9
10

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

Form-'E' (See Paragraph 05(g), FEPD Circular No. 34/2018)

Statement of Paid Amount as Export Subsidy in the Sector of Export of Photovoltaic Modules in Accordance with FEPD Circular No. 34/2018 for the Month of.......... Year.........

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

S.No	Name and Address of Subsidy Applying Establishment	Details of Export	Paid Subsidy (Taka)	Date of Payment	Pending Applications at Branch	Details of Product	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: