FEPD Circular No. 35: Amendment of Form Kha for Alternative Cash Incentive in RMG/Textile Sector

Foreign Exchange Policy Department Bangladesh Bank Head Office Dhaka. Ref. No. FEPD Circular No. 35 Date: ------------------- September 18, 2017

To All Approved Dealers in Foreign Exchange Transactions.

Dear Sir,

Amended procedure for payment of alternative cash incentive in lieu of Customs Bond and Duty Draw-back in the Export-oriented Domestic Textile Sector.

We draw your attention to the application Form 'Kha' attached to FEPD Circular No. 09, dated March 05, 2001, on the subject mentioned above.

2. It has been decided that the recipient entity shall be eligible for cash incentive against the export of ready-made garments produced by another establishment through the medium of domestic back-to-back letter of credit by the Export-oriented Composite Ready-made Garment Manufacturing-Exporting Establishment, using yarn collected from BTMA member mills. In this regard, necessary amendments have been made to Application Form 'Kha'. This decision will apply to applications for cash incentive (according to the amended Form 'Kha') against the export of goods shipped from December 29, 2016. However, in cases where the prescribed 180-day time limit for submission of application has already expired, the application may be submitted within 45 days of the issuance of this circular.

3. All applicable instructions issued in FEPD Circulars/Circular Letters regarding the payment of cash incentives in the textile sector will remain unchanged.

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

Yours faithfully,

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

Form-'Kha' (Page-1) Application by Export-oriented Composite Ready-made Garment Unit for Alternative Cash Incentive in lieu of Customs Bond and Duty Draw-back for Export of Ready-made Garments produced using Fabrics produced by Domestic Yarn.

(a) Name and Address of the Applying Composite Unit:....................................................................................... Export Registration Certificate (ERC) Number: ................................................................................................

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

(c) Source of Collection of Materials Used in the Production of Exported Ready-made Garments:

Name and Quantity of Material	Name of Supplier, Domestic Back-to-Back Letter of Credit Number, Date and Value (in case of Local Collection)	Back-to-Back Import Letter of Credit Number, Date and Value (in case of Import from Abroad)	Name and Address of the Recipient of Alternative Cash Incentive
1	2	3	4

(Certified legible copies of the Letters of Credit in columns 2 and 3 must be submitted. The name and address of the recipient of the alternative cash incentive must be clearly mentioned in the Domestic Back-to-Back Letter of Credit. For the yarn mentioned in column 2, a certificate from BTMA confirming permission to collect via domestic back-to-back letter of credit from BTMA member mills, along with the signature of the BTMA, must be submitted. A certificate from the supplier of this yarn stating that Customs Bond facility has not been availed on the materials used in the production of this yarn, and that Duty Draw-back or Alternative Cash Incentive has not been or will not be applied for, must be submitted.)

(d) Information regarding the production of fabrics by another establishment using yarn collected under Domestic Back-to-Back Letter of Credit from BTMA member mills:

Name and Address of Fabric Producing Establishment	Quantity of Fabric Produced	Fabric Production Cost	Method of Payment of Production Cost
1	2	3	4

(Relevant documents regarding the Fabric Production Cost mentioned in column 3 must be submitted.)

(e) Details of Final Export Shipment:

Description of Goods	Quantity	Invoice Value (in Foreign Currency)	Date of Shipment	EXIM Number	Repatriated Export Value and Date of Repatriation (in Foreign Currency)
1	2	3	4	5	6

(Legible certified copies of Export Invoice, Bill of Lading/Air Way Bill, and the original Export Value Repatriation Certificate (PRC) must be submitted with the application.)

(f) Amount of Alternative Cash Incentive Applied For:

Value of Fabrics Produced using Domestic Yarn Used Against the Export Letter of Credit/Contract	Amount of Cash Incentible at the Applicable Rate on the Fabric Value Mentioned in Column 1
1	2

I hereby declare that an application for alternative cash incentive is being made against the export of ready-made garments produced using fabrics made from yarn produced in Bangladesh, collected through the sources declared above. We have not availed Customs Bond facility for the materials used in this production, nor have we applied for Duty Draw-back facility, nor will we do so. In the event that the information/declarations provided in the application are found to be false/incorrect subsequently, the entire or part of the cash incentive provided will be recovered from us/from our account.

Date: .................. .............................................. Signature and Designation of the Proprietor/Authorized Officer of the Applying Establishment

Form 'Kha' (Page-2) (To be used by the Bank Branch Responsible for Determining Payment of Alternative Cash Incentive)

(g) Calculation of Payable Amount of Alternative Cash Incentive:

(* This rate must be mentioned from the relevant section of the Import Policy Order/other sources mentioned in that section)

(9) Maximum Acceptable Value for Use of Domestic Fabrics for the Export Earnings Mentioned in Column (9)	100-(2) = --------- (9) / 100
(10) Value of Fabrics Collected from Other Domestic Producers Mentioned in Sub-section (2) of G (if any)
(11) Maximum Acceptable Value for Use of Fabrics Produced from Domestic Yarn by the Applicant	(10)-(11)
(12) Value Declared by the Applicant for Use of Fabrics Produced from Domestic Yarn (in Sub-section C)
(13) Amount of Cash Incentive Payable: The Lower of Columns (10), (12) and (13) multiplied by (Applicable Rate) * Export Value at the Date of Repatriation at the ODI Site Purchase Rate of the Relevant Foreign Currency

Upon finding that all documents required to be submitted with the application and the information provided in the application are correct, approval is granted for payment of Taka ...................................

Amount of Cash Incentive Paid: Taka: ......................................... Date of Payment: ....................... ........................................................... Signature and Designation of the Officer Approving Payment

Description of Export Goods	Minimum Percentage of Domestic Value Addition for Export Goods *	Total Repatriated Export Value
(1)	(2)	(3)
Amount of Ship Freight in CNF Export Cases	Commission Payable Abroad from Export Value, etc.	Net FOB Export Value {(3)-(4+5)}
(4)	(5)	(6)
CNF Value of Imported Materials Used in Production of Export Goods (according to Column 3 of Sub-section G)	Amount of Export Earnings Required for Proper Utilization of Imported Materials	Portion Counted as Adjustment Against Use of Domestic Fabrics Among Export Earnings (6)-(8)
(7)	(8)	(9)
100 = (7) * ------- / 100-(2)
1	2	3