Automated bond utilisation permission mandatory for export industries

Using automated system is made mandatory for issuing utilisation permission (UP) for export-oriented industries from December 1, as allegations of misuse of duty-free facility galore.

The National Board of Revenue (NBR) announced the decision Sunday, after a meeting with leaders of the country's business bodies.

The UP would have to be obtained from the Customs Bond Management System (CBMS) developed to modernize, ensure transparency, and make the country's bond-management system technology-driven.

The NBR launched the automated software January 1, 2025. However, the response from the exporters was not inspiring in the last 10 months to obtain automated UP, says a press statement issued by the NBR.

"Most institutions are still taking UP through manual procedures, and only a limited number are using the online system," the firman reads.

To ensure fast and transparent service delivery to bonded entities, representatives from leading organizations of the garment, knitwear, accessories, textile, and leather-goods sectors expressed unanimous agreement Sunday at a 'Meet the Business' dialogue with the revenue board.

The consensus comes from Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA), Bangladesh Textile Mills Association (BTMA), and Leathergoods And Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB).

Talking to the FE, BKMEA President Md Hatem hails the decision to automate bond system.

"We expect end of underhand dealings after the CBMS use made mandatory," he says.

Currently, the bonded-warehouse licence-holding entities are receiving online services through 24 modules of this software operated by three Customs Bond Commissionerates under the NBR.

The licensed export-oriented industries import raw materials duty-free by obtaining UP from the relevant Customs Bond Commissionerate in accordance with the coefficients approved by the Duty-Exemption and Drawback Office.

The NBR expects faster, more transparent and more accountable service delivery after CBMS made mandatory.

It's easier, more time-saving, and cost-effective service access for bonded entities.

The CBMS has automated and transparent recordkeeping due to inputting raw material input and output data into the software.

The revenue board hopes the system would significantly reduce disputes related to bond operations.

By making the automated CBMS system mandatory for bonded- warehouse management with the goal of creating an investment-friendly environment and strengthening the country's economy, NBR's digitization initiatives take another step forward.

The government's revenue authority remains committed to gradually bringing all revenue-related activities under full automation to ensure transparency and accountability.

"As the use of the software has not been mandatory, its utilisation has not reached the expected level even after 10 months. Based on user feedback, necessary improvements and modifications have been made to make the CBMS system more user-friendly."

In the discussion, a proposal was unanimously adopted to make the use of CBMS mandatory for obtaining and providing all UP-related services as soon as possible, preferably from December 1, 2025. The NBR will soon issue an official directive in this regard.

Business leaders attending the meet urged the national board of revenue to disclose list of bond-misuse offenders and make sure their exemplary punishment.

They mentioned that honest businesses are not to take responsibility for such deceptive acts.

The meet-the-business dialogue was held at the NBR headquarters in Dhaka with NBR Chairman Md Abdur Rahman Khan in the chair.

President BGMEA Mahmud Hasan Khan urged the revenue board to identify garment exporters accused of abusing the bonded-warehouse facility, saying that the industry should not be held accountable for violations committed by a small group.

"Tell us specifically which of our members are misusing the bond facility. If any BGMEA member is found involved, we will halt all services to them. We have already warned 22 of our factories. We will not accept the entire industry being blamed for the actions of a few," he said.

Mahmud Hasan said allowing raw-material import under bank guarantees for factories without bond licences could ease compliance and reduce irregularities.

"If this system is implemented properly, at least 200 of our members will surrender their bond licences. Many want to avoid the complexities of maintaining a licence. If imports can be done with a bank guarantee, many will simply opt out," he notes.

He welcomes the government plan to place the authority for granting tax exemptions under parliament.

"This power should no longer rest with the NBR Chairman or the Finance Adviser. We support this move. At the same time, any withdrawal of existing facilities must also go through parliament. Sudden cancellations through SROs should end."

The BGMEA chief reaffirms the industry's support for digitisation. "We are strongly in favour of automation. Without it, corruption will not stop. It must happen - and soon."

The BKMEA president, Mohammad Hatem, also called for exemplary punishment of those misusing the bond facility.

"Bond abusers never face consequences because they manage to influence everyone. Meanwhile, genuine businesses are harassed. Bring the offenders into the public eye - publish their photos in newspapers," he urges.

He further suggests removing HS Codes for imports under bond licences, arguing that most complications originate from classification disputes. "Minor errors lead to accusations of false declarations and heavy penalties. Resolving HS Code-related issues will make import and export processes far smoother."

Hatem also notes that frequent transfers of customs and revenue officials delay file processing and that small factories face difficulties in securing bank guarantees. He calls for special consideration for smaller units.

Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association President Md Shahriar told the meet nearly 300 accessories manufacturers are facing cases worth BDT 5,000 million for a lack of facilities for certain raw materials.

However, there were no matters of revenue dodging. This has forced them to procure these materials from the local market, paying VAT, despite the legal issues that have arisen.

He urges the NBR Chairman to intervene and resolve the matter.

The NBR Chairman, Abdur Rahman Khan, said the list of bond- licence abusers could not be disclosed but assured that the entire bond system would be automated shortly.

"No bond-related work will be done manually in future."

He announced at the NBR-business meet that the use of the Customs Bond Management System will be made mandatory for issuing utilisation permissions.

"We have reached an agreement with businesses on this. A circular will be issued - we will not accept any paper-based submissions. The system will be fully automated, and from 1 December, CBMS use will be compulsory," he states.

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