The central bank of Bangladesh, the Bangladesh Bank (BB), has recently issued instructions to all concerned banks pertaining to who amongst the garment exporters can avail 1 per cent special cash incentive.
As per BB, all exporters who availed 14 per cent cash incentives – 4 per cent cash incentive in place of bonded facility and duty drawback, 4 per cent cash incentive for export-oriented small and medium apparel industries, 4 per cent cash incentive for exporting to new markets excluding the US, Canada and the European Union, and another 2 per cent additional incentive for apparel export in the Euro zone – are not eligible to avail the benefit of 1 per cent special cash incentive.
The central bank further warned all banks as well as the officials of the exporters’ association of punitive measure for any misuse in disbursing cash incentive.
As per the circular issued by BB, there would be no bar on availing 4 per cent cash incentive in place of bonded facility and duty drawback and the special incentive simultaneously. Besides, locally owned entities located in the export processing zones and economic zones would be entitled to avail the incentive against their exports in the EU, the US and Canada.
However, the BB circular underlined that the exporters must ensure at least 30 per cent local value addition to become eligible for the special incentive.
Among other conditions, the central bank has maintained that products manufactured in own factory of the exporter would be entitled for 1 per cent special cash incentive on net price of freight on board.