FEPD Circular No. 35: Export subsidy for SME in textile/RMG sectors

Foreign Exchange Policy Department
Bangladesh Bank
Head Office
Dhaka.
Ref. No.-----------------

FEPD Circular No. 35 Date: -----------------

To All Authorized Dealers of Foreign Exchange Transactions.
Dear Sir,

Additional Benefits for Small and Medium Industries Included in the Export-Oriented Ready-Made Garment (RMG) Sector (Knit, Woven, and Sweater).

Reference is drawn to your attention to Paragraph 2 of FEPD Circular No. 35, dated 22 September 2019, FEPD Circular No. 48, dated 15 December 2019, and FEPD Letter No. 4, dated 22 January 2020.

2. It is informed that under the existing system, an additional cash subsidy facility is available for the export of products manufactured through the use of 100% domestic yarn/fabric in favor of all small and medium production-exporter industrial establishments included in the export-oriented knit, woven, and sweater sectors of the small and medium home textile and terry towel industry for the 2019-2020 fiscal year. Alongside this existing system of providing cash subsidy on the value of fabric used in the product in the case of 100% domestic yarn/fabric use, it is hereby informed according to the government decision that,

(a) Small and medium production-exporter industrial establishments shall be entitled to cash subsidy on the percentage of local value addition, with a minimum of 30% local value addition, in the case of exporting products manufactured through the use of 100% foreign yarn/fabric.

(b) Small and medium production-exporter industrial establishments shall be entitled to cash subsidy on the percentage of local value addition, with a minimum of 30% local value addition, in the case of exporting products manufactured through the use of both domestic and foreign types of yarn/fabric.

It must be ensured in this regard that the additional cash subsidy mentioned above has not been previously taken for the export.

3. The condition that cash subsidy for the export of products manufactured through the use of 100% foreign or both domestic and foreign types of yarn/fabric and duty drawback/customs bond facilities shall not be applicable simultaneously shall remain as before. The aforementioned cash subsidy shall be applicable for goods shipped during the 2019-2020 fiscal year, and a separate application for cash subsidy along with necessary documents according to Annexure Form 'A' must be submitted, and verification work must be conducted. In cases where the deadline for submitting the application has already passed, the application may be submitted to the concerned authorized dealer bank branch within 45 days from the date of issuance of this circular.

All other instructions of the respective FEPD Circulars/Circular Letters regarding the provision of cash subsidy to all small and medium industrial establishments included in the export-oriented knit, woven, and sweater sectors of the garment industry shall remain unchanged. It is requested to inform all concerned parties about this.

Yours faithfully,

Enclosure: As per list.

(Mohammad Khurshid Wahab)
Managing Director
Phone: 9530123
25 August 2020
10 Bhadra 1427

(Note: Paragraph 03, FEPD Circular No. 35/2020) Form - 'A' Application for Cash Subsidy for Small and Medium Industries Included in the Export-Oriented Ready-Made Garment (Knit, Woven, and Sweater) Sector

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

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

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

Name and Address of Supplier	Name and Quantity of Materials	Number/Documentary Collection/Bank Arrangement for Payment and Value of Domestic Back-to-Back Letter of Credit	Letter of Credit/Back-to-Back Letter of Credit/Documentary Collection Number, Date, and Value	Remarks
1	2	3	4	5

(A legible certified copy of the Letter of Credit in columns 3 and 4 must be submitted. In the case of using the materials mentioned in column 3, a declaration by the exporter that customs bond facility or duty drawback facility is not availed must be submitted. In the case of using local materials, if customs bond facility or duty drawback facility is availed, that portion must be excluded from the calculation of value addition. A certificate (according to Form 'B') from BGMEA/BKMEA/BBTLLMEI/BSTMPI regarding the description, value, and source of the exported goods must be submitted.)

(d) Details of Export Shipment:

Description of Goods	Quantity	Name of Importing Country	Invoice Value (Foreign Currency)	Date of Shipment	EXP Number	Export Value and Date of Repatriation in Foreign Currency
1	2	3	4	5	6	7

(A complete set of legible certified copies of the Commercial Invoice, Packing List, and Bill of Lading/Air Waybill (FCR) issued and certified by the transport authority as proof of shipment (subject to compliance with instructions of FEPD Circular No. 12/2020), Bill of Exporter (issued and examined by the Customs Authority and certified by the transport authority after stamping), etc., and the Export Value Repatriation Certificate must be submitted.)

(e) Amount of Cash Subsidy Applied:

Amount of Ship Freight (if applicable for repatriated export value)	Commission, Insurance, etc. Payable in Foreign Currency (if any)	Net FOB Export Value
1-(2+3)	1	2	3	4

(A legible certified copy of the Freight Surcharge containing the mention of ship freight amount must be submitted, if applicable)

Value of Products Used in Export Goods Production	Rate of Local Value Addition	Amount of Local Value Addition	Cash Subsidy Payable
[(4)-(6)-(7)]/(4) x 100	(4)-(6)-(7)	(9) x 4%
Domestic Goods	Portion of Customs Bond Facility or Duty Drawback Facility Availed from Domestic Materials	Imported Goods
5	6	7	8	9	10

(If imported goods are unused or previously imported goods are used, the same must be mentioned in column 6 above according to the appropriate production cost calculation. A production cost calculation must be submitted in this regard.)

Hereby, it is declared that an application for cash subsidy for small and medium industries is made for the export of ready-made garments/textile items produced in our own factory. No additional cash subsidy has been previously taken for the aforementioned export. All information/declarations provided in this application are complete and correct. If any wrong/false information/fraud/forgery is discovered later, the entire amount or a specific part of the cash subsidy taken will be recovered from us and/or from our bank account.

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

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

Amount of Ship Freight (if applicable for repatriated export value)	Commission, Insurance, etc. Payable in Foreign Currency (if any)	Net FOB Export Value
1-(2+3)
(1)	(2)	(3)	(4)

Value of Products Used in Export Goods Production	Rate of Local Value Addition	Amount of Local Value Addition	Amount of Cash Subsidy Payable (in Taka)
[(4)-(6)-(7)]/(4) x 100	(4)-(6)-(7)	(9) x 4% x
Domestic Goods	Portion of Customs Bond Facility or Duty Drawback Facility Availed from Domestic Materials	Imported Goods
(5)	(6)	(7)	(8)	(9)	(10)

Amount of Cash Subsidy --------------- Taka (in words: -----------------).
Date of Payment: --------------------

---

Signature, Name, and Designation of the Authorized Bank Officer for Cash Subsidy Approval

(At the time of export value repatriation, the official ODI rate of the concerned foreign currency)

(Note: Paragraph (c) of Form 'A', FEPD Circular No. 35/2020) Form - 'B' Certificate of Verification Issued by BGMEA/BKMEA/BBTLLMEI/BSTMPI Certificate of Verification for Receiving Cash Subsidy for the Export of Ready-Made Garments/Textile Items

1. Name, ERC Number, and Address of the 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 of Goods Mentioned in Invoice: Value:
6. Source of Local Materials Used in the Production of Exported Ready-Made Garments/Textile Items (Name and Address of Supplier):
   Quantity: Value:
7. Source of Imported Materials Used in the Production of Exported Ready-Made Garments/Textile Items (Name and Address of Supplier):
   Quantity: Value:
8. Details of Exported Goods: Quantity: Value:
9. Date of Shipment: Destination Port:
10. EXP Number: Value: Date:
11. Total Repatriated Export Value (in Foreign Currency): Net FOB Export Value (in Foreign Currency):
12. Certificate Number of Repatriated Export Value: Date:

Signature and Date of Exporter

Hereby, it is verified that the information mentioned in the aforementioned paragraphs is correct and reliable for the application of cash subsidy for the export of ready-made garments/textile items by sourcing materials from the sources mentioned in items 6 and 7 above for production in our own factory. The authenticity/reliability of the foreign buyer/importer has also been ensured.

Signature and Date of Exporter

It has been found that the declaration mentioned in item 8 above regarding the declared export value is reasonable 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 the cash subsidy on the determined local value addition from the repatriated export value.

Signature, Date, and Seal of Two Authorized Officers of BGMEA/BKMEA/BBTLLMEI/BSTMPI

[Any kind of rubbing, scratching, or correction will render this certificate void.]