Mr. Abul Maal A Muhith
In his Budget Speech 2014-15, Bangladesh Finance Minister Abul Maal Abdul Muhith has proposed reduction of supplementary duty rates on fabrics, garments and clothing accessories.
“The Value Added Tax and Supplementary Duty Act, 2012 is scheduled to be implemented from 1st July, 2015. Bearing in mind the imperative of rationalising the present incompatible import tariffs in the light of the provisions made in the new VAT law and also the capacity of tolerance by the domestic industries, existing supplementary duty (SD) rates shall have to be reduced,” Mr. Muhith said.
The Budget proposes to reduce supplementary duty on woven fabrics (excluding HS code 5407.10.10) from the existing 30 percent to 20 percent, on most knitted or crocheted fabrics from 45 percent to 30 percent, on track suits and other garments from 45 percent to 30 percent, and on various clothing accessories form 60 percent to 45 percent.
In the light of ‘Vision 2021’, which aims to transform Bangladesh into a middle income country by 2021, the target growth for the next fiscal year 2014-15 has been pegged at 7.3 percent, which would increase to 10 percent by 2021. To achieve this target, a number of measures, including stimulus packages will be taken for readymade garments and other sectors to add further momentum to the export sector, Mr. Muhith said. Steps would also be taken for product and market diversification in the export sector, he added.
In order to help create favorable production environment compatible with international standards, the Budget proposes to allow the export-oriented readymade garments sector to import without duties on certain conditions the raw materials necessary for the manufacture of prefabricated buildings. “In addition to that, the existing duties on fire resistant door, emergency light, sprinkler system, etc. are being proposed to be fully exempted in order to ensure internal security and compliance of standards by the RMG sector,” the Budget Speech read.
For the continuation of the development of the textile sector, the present 10 percent duty chargeable to a few raw materials used in this sector is proposed to be reduced to 5 percent. “Flex fiber, a raw material of textile sector, used to make the fabrics bright is proposed to be subjected to 5 percent duty from the present 10 percent. Likewise, the existing 5 percent duty on artificial staple fiber is proposed to be reduced to 3 percent from the existing 5 percent,” Mr. Muhith said.
The Budget also names the garment industry among the six priority sectors identified for imparting training of international standards over a period of three years using 32 institutes of three ministries, SME department of Bangladesh Bank, PKSF and 9 industrial organisations.
Fibre2fashion News Desk - India