Apparel leaders oppose inclusion of HS code in bond licence

Apparel sector leaders demanded withdrawal of mandatory inclusion of HS code in the bond licence while getting imported raw materials released for readymade garment (RMG) exports under the duty-free facility.

They argued the "unnecessary" requirement for the inclusion of harmonised system (HS) codes in bonded warehouse licence has been causing delays in the release of raw materials in ports while increasing costs.

On December 30, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), in a letter signed by its president AKM Salim Osman to National Board of Revenue (NBR), made the case and urged necessary measures to ease the import and export process for the sector.

Export-import activities have severely been affecting as releasing of raw materials are being delayed in Dhaka and Chattogram custom houses due to the provision of mandatory inclusion of HS codes of import items with the bond licence, Mr Osman said in the letter.

There are 7,165 customs-related HS codes globally while more than 1,000 HS codes are used for yarn that included the percentage of yarn in fabrics, various types of yarn and its colour, he said.

Besides, buyers nominate a wide range of materials depending on latest trend and fashion, which is not always possible to predict, he said, adding fashion is changing frequently.

The country has its import policy and there is no scope for the import of raw materials violating it, he said, adding the HS code inclusion is nothing but time-consuming.

When asked, Fazlee Shamim Ehsan, a director of the BKMEA, said all the imports under the bond facility are for re-exports and the government has all the statistics of imports and exports.

"It is very difficult for the exporters to misuse the raw materials imported under the facility as the NBR preserves all the data of import and re-exports," he said.

Exporters have to import some of the raw materials for fashionable items as per the requirements for buyers and the NBR can easily release the consignments without asking for HS codes of the items in the bond licence, he said.

"The codes are mentioned in the UD issued by the BGMEA or BKMEA," he said, claiming exporters face harassment, financial losses and shipment delay for the provision.

The trade body, in the letter, demanded withdrawal of the provision for mandatory inclusion of HS codes of raw materials in the bond licence taking the fast-changing fashion industry into consideration.

Exporters have to import various types of raw materials, which are difficult for them to know in advance.

The BKMEA urged the NBR to issue a directive, allowing the release of raw materials as per the description of buyers' requirements, and HS codes mentioned in the utilisation declaration (UD) issued by the BKMEA and also BGMEA (Bangladesh Garment Manufacturers and Exporters Association) in line with the import policy.

It also requested not to consider the errors in HS codes, if any, to be mis-declaration, saying the authorities rather should allow the importers to release the consignments with imposing tax under appropriate codes.

The trade body demanded the modification of bonded warehouse licencing rules, saying that RMG exporters are facing discount or cancellation of orders as they are missing the lead time because of 'unnecessary provision.'