Exporters are now free to sell their used capital machinery and spares, imported under duty-free facility, on the local market at duty-deducted cheaper prices.
Heretofore, 100-per cent export-oriented industries are entitled to enjoy bonded-warehouse facility but had to pay duty-taxes for selling or transferring that duty-free machinery locally.
The customs wing of the National Board of Revenue (NBR) issued Wednesday a circular lifting the deadweight to clear the path of affordable resale.
Exporters said the restrictions on sale of used machinery put many in problem when they wanted to replace existing machinery or import advanced ones. Due to the pecuniary barrier they used to scrap the used machines despite their having working capacity.
According to the current customs act, sale of duty-free machinery on the local market would require payment of full duty-taxes applicable to commercial imports.
As such, despite having demand for such machinery on the domestic market, the exporters were unable to sell off those as none can afford the duty-loaded high price of second-hand capital goods.
The NBR issued the order, signed by second secretary of customs, export and bond wing Mashiur Rahman Mondol, under section 219B of the Customs Act 1969.
There were no such rules or orders earlier on transfer or sale of used duty-free machinery or spare parts, said a senior customs officer.
Absence of specific guidelines created confusions in the field-level customs offices, too, much to the embarrassment of the industrialists.
"In case of transfer or sale of duty-free used machinery from one bonded exporter to another, the exporter will enjoy concessionary prices excluding duty-taxes but prior approval from customs commissioners will be required," the circular reads.
However, for selling or transferring capital machinery to non-bonded exporters, a calculation of depreciation on use period, production capacity and amount of tax rebate will have to be followed.
The rebate will be allowed on the basis of differences between actual payable duty-taxes and the concessionary rate availed by the bonded exporter to import the capital machinery.
In case of not having date-of-expiry certificate for the duty-free machinery, exporters will have to have a survey conducted by any well- reputed survey company to determine such a machine's life.
However, the duty-free machinery would be consider scrap material after 15 years of its import and those would have to be disposed of under a separate order of customs, said a senior customs official.
The order will be valid for the export-oriented industries under Bangladesh Export Processing Zones Authority (BEPZA), Bangladesh Economic Zones Authority (BEZA), and Export Processing Zones (EPZ).
Responding on the latest circular, first vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Managing Director of Well Designers Ltd Syed Nazrul Islam said they have to study the order before making a commenting on this newly opened window to the trade-clearing customs workings.