NBR sets conditions for firms in economic zones

The government made obtaining the local sales permit (LSP) mandatory for the industries in Bangladesh's economic zones if they were willing to sell their products for domestic consumption.

Also, they will be required to obtain local procurement permit (LPP) to enjoy tax and duty benefit on purchase of raw materials and semi-finished goods from domestic market under the bonded-warehouse facility.

The twin rules came from the National Board of Revenue (NBR) for the firms from home and abroad that are setting up industries in the country's special economic zones.

As per the rules, officials said, the factories will have to obtain the permit from the Bangladesh Economic Zones Authority (BEZA) to produce before the customs authority.

The customs wing of the NBR issued Thursday a revised order amending its standing order on the customs (economic zones) procedures 2017.

Under provision of the revised order, factories in the EZ will be able to collect raw materials from local market and sell finished products to domestic customers under a legal framework.

As EZ factories enjoy bonded-warehouse facility, there will be "in-bond" and "ex-bond" calculations of raw material procurement from the domestic market.

Officials said earlier duty-free facility on import of raw materials was confined to only export-oriented industries in the EZs. Later, the government allowed domestic industries and commercial enterprises also to enjoy the facility, for parity's sake.

As per recent order, manufacturing units in the EZs are required to apply for the LPP to the BEZA.

They will have to furnish the LPP for enjoying duty-and tax-free trading benefit on procuring raw materials and semi-finished materials from the internal market.

Currently, the local manufacturers have to pay ATV (advance trade VAT) and AIT (advance income tax) on procurement of products.

While issuing the LPP, BEZA will determine the quantity to be approved in the permit on the basis of approved list of raw materials or semi-finished materials or intermediate goods.

The EZ enterprises have to submit the LPP to the customs authority to proceed further.

In October 2017, the NBR relaxed a provision under which EZ factories can sell finished products on the local market by paying duty-taxes on raw materials that would be imported under bonded-warehouse facility without paying duty.

Earlier, duties and taxes were applicable to only finished goods of the EZ factories for supplying goods for local consumption.

Factories which will procure raw materials from domestic market will have to pay only VAT on raw materials and finished goods during selling those on local market.

[email protected]