In a major boost to the Bangladesh readymade garment sector, Finance Minister Abul Maal Abdul Muhith has announced reduction of supplementary duty (SD) on import of woven fabrics to 20 percent, in 2013-14 Budget.
Presenting the Budget in Jatiya Sangsad, the Bangladesh Parliament, Mr. Muhith said, “Woven fabrics, made of different raw materials and classifiable under different headings of Bangladesh customs tariff schedule are presently chargeable to 131.33 percent duty and tax incidence, including 45 percent SD.”
Mr. Muhith said the legitimate import of woven fabrics is not increasing proportionately to the demand simply because of the high tariff. He said the SD on commercial import of woven fabrics would be reduced from the present 45 percent to 20 percent for financial year 2013-14 that begins on July 1, 2013.
The Minister also proposed to exempt fully the present 5 percent customs duty (CD) applicable to artificial filament tow to be enjoyed by textile mills on certain conditions.
He said the customs duty exemption has been made in view of the increasing demand of acrylic yarn made products, including sweater, both inside and outside the country.
Among other incentives, the Minister proposed extension of the existing provision of charging lower rate of 15 percent tax on jute and textile sector from June, 2013 to June, 2015.
In addition, CD on textile materials under HS Code 3403.91.00 has been reduced from 12 percent to 5 percent.
On the other hand, SD on other textile fabrics with Polyurethane HS Code 5903.90.00 has been increased from zero percent to 45 percent, and concessionary benefit of five percent given by SRO on artificial filament tow with HS Code 5502.00.10 has been reduced to zero.
Talking about the country’s jute industry, in his Budget speech, the Minister said Mandatory Packaging Act, 2010 has been passed to encourage the use of jute.
He said the Government has assumed the past liabilities of the Bangladesh Jute Mills Corporation (BJMC) amounting to Tk 23.16 billion. He added that the Government has taken steps to make BJMC profitable. “Hopefully, it will turn out to be a profitable entity in future,” he said.
During the current financial year that ends on June 30, Bangladesh’s GDP growth rate is likely to be around six percent, the lowest since 2009-10 when the growth rate was 6.1 percent. The Budget aims to put the growth rate back on track to 7.2 percent in 2013-14, by increasing spending by 16 percent to 2.22 trillion taka in the coming year.