RMG leaders decry additional cost, harassment by customs over HS Code

Leaders of the country's apparel sector have raised harassment allegations against customs authorities in importing raw materials for export goods and listing them in bond licences, which is known as the Harmonised System (HS) Code.

Customs authorities ignore the National Board of Revenue's instructions regarding the HS Code, forcing entrepreneurs to bear additional expenses, they said during a pre-budget meeting with the NBR at its headquarters in Agargaon of the capital.

"A letter has also been issued from the NBR to address the issues related to the HS Code. But it is not being implemented at the field level," Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said on the occasion.

New products have been added to the export item in the last 30 years, making it necessary for new lists of raw materials to be added to the bond licence.

"When we apply to customs authorities in this regard, they don't grant us the approval. Maybe, only five items are approved out of 20," he added.

In response to the complaints of the apparel industry leaders, NBR Chairman Abu Hena Md Rahmatul Muneem asked them to be more specific.

"Rather than saying you are being harassed, inform us where the harassment is happening on a case-by-case basis," the NBR chairman said.

Today's meeting was also attended by BKMEA president AKM Salim Osman, and Bangladesh Textile Mills Association president Mohammad Ali Khokon.

The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), another leading organisation from the RMG sector, also raised allegations of harassment at the field level.

Meanwhile, the Bangladesh Textile Mills Association demanded the withdrawal of existing duties and taxes on the import of manmade fibre raw materials.

At the meeting, BGMEA proposed to halve the source tax on garment exports to 0.5% from the upcoming fiscal year and to keep it effective for the next five years.

They also proposed halving income tax against cash assistance; halving the exporters' retention quota; VAT exemption on recycled fibre production; and amending the existing condition of VAT exemption against subcontracting.

They further proposed import facilities for new machinery import and to reduce duty on the import of firefighting equipment.

The NBR chairman responded positively to the proposals presented at the meeting.

He, however, said, "We often give facilities. But the entire industry suffers if the facilities are misused."