CUSTOMS Formalities

for Import & Export

M.FAKHRUL ALAM
Commissioner 1

Customs, Excise & VAT

 Outline of the Presentation
 NBR ,its Structure & functions.
 Customs: its Structure & functions.
 Stakeholders and Allied Acts in Customs.
 Documents Required for Customs Formalities.
 Tariff & Non-Tariff Regulation.
 Import/Export General Manifest (IGM/EGM).
 Customs Assessment & Clearance Procedure.
 Classification & Valuation of Goods.
 Transit & Transhipment.
 Other Duties and Taxes.
Customs Auction and Process.
2

 Organization Structure of NBR
Ministry of
Finance

Banking & Economic

Internal Financial
Finance Relations
Resources Institutions
Division Division
Division Division

National Board of Revenue(NBR)

Income
Customs VAT
Tax

Custom House/Customs Station 3

 Customs Administration
Bangladesh Customs

Customs Valuation (1) Customs House

Customs Intelligence (1)
Customs, Excise and VAT
Commissionerate (12)
Land Customs Stations
(6)
Customs Bond
Commissionerate (3)
Customs Risk Management
Commissionerate (1)

Airport Foreign EPZ/

Assessment Jetty post/ CFS/ICD
/Airfrei BEZA
Group/Sec Exam Courier
ght
 NBR and it’s Functions/1

 National Board of Revenue (NBR) is the central

authority for tax administration in Bangladesh.

 NBR is established by the President's order no-

76 of 1972.

 Collect tax revenue (Import duties, Value

Added Tax, Supplementary Duty, Excise Duty,
Income Tax, other fees & Charges) for the
government.

 Formulate tax laws & policies in relation to the

Customs Act, VAT Act, Excise and Salt Act &
Income Tax Act. 5
 NBR and it’s Functions/2

 Administer Customs, VAT, & Income Tax

services under supervision of Internal
Resources Division(IRD).

 Negotiate tax treaties and agreements with

foreign Govt.& world bodies.

 Maintain liaison with international organizations

like, WCO, WTO, RILO, OPCW on international
rules, obligations related to trade policy.

 Participate in international deliberations on

economic issues, fiscal policies and tax
administration. 6
Bangladesh Customs Network

3 Sea
Ports

3 International
Airports

24+ Inland
Container Depots

30+ Active
Land Ports

7
 Key Functions of Customs
 Collect revenue at import & export stage.

 Implement laws and regulation in relation to

transnational trade and commerce.

 Ensure expeditious and hassle free clearance.

 Prevent illicit trade and smuggling activities.
 Prevent Money Laundering activities.

 Provide Support to legitimate trade.

 Ensure Trade Facilitation.

 Ensure ease of doing business.

8
 Laws implemented by Customs
 The Customs Act 1969
 Value Added Tax and SD Act 2012
 The Imports and Exports Control Act, 1950
 The Foreign Exchange Regulation Act, 1947
 Import Policy Order & Export Policy.

 Allied Act:
Arms Act, 1878 Patent and Design Act 1911
Explosives Act, 1884 Livestock Importation Act,1889
Trademark Act 2009 Destructive Insects and Pests Act,1914
Copyright Act 2000 Merchant Shipping Act, 1923
Post Office Act, 1898 Narcotics Control Act, 1990
Anti Money Laundering Act, 2002
9
 Stakeholders
Importers
Exporters
Sea Ports, Air port, Land port, ICD-CFS
Civil Aviation
Clearing & Forwarding Agents
Shipping Agents
Freight Forwarding Agents
Courier Service Operators
Airline Operators
Bank and Financial institution
Other Govt. Agencies[Drug Admn., BSTI, Atomic
Energy, Quarantine Dept, CCI&E, DPHN, etc] 10
 Definitions : As per RKC
 “Customs Formalities” means all the operations
which must be carried out by the persons
concerned and by the Customs in order to
comply with the Customs law.

 “Customs Clearance”means the accomplishment

of the Customs formalities necessary to allow
goods to enter home use, to be exported or to
be placed under another Customs procedure.

 “Customs Control” means measures applied by

the Customs to ensure compliance with Customs
law.
11
 Misdeclaration (sec-32)

 If any person, in connection with any

matter of customs –
(i) makes or signed or delivered to an
officer of customs any declaration,
notice, certificate or other document, or
(ii) makes any statement in answer to any
question required under this Act, or
(iii) transmits any statement, document,
information or record through electronic
device and such document or statement is
untrue in any material particular, he shall
be guilty of an offence under this section.
12
 Prohibition
Section-15 (Import Banned Items):
 Counterfeit coin.
 Forged or counterfeit currency note.
 Obscene book, photo, article, paint etc.
 Goods having counterfeit trade mark or a
false trade description.
 Goods with a trade mark that is used by any
producer in Bangladesh.
 Piece-goods manufactured outside Bangladesh.
 Goods with a design that is patented in
Bangladesh.
13
 Restriction & Confiscation

Section-16: The Govt. may by notification in

the official gazette prohibit or restrict of
import or export of any goods of specified
description by air, sea or land.

Section-17: Goods imported or to be

exported in violation of the provisions of
section 15 or of a notification under section
16 to be detained and confiscated.

14
 Non-Tariff Regulation under IPO
 Clearance from MOC & MOH for Arms.
 Block List from Drug Admn. for Pharma. Raw Materials.
 Consumption/Radiation certificate for food products
from Atomic Energy Commission.
 NOC for food, cosmetics & consumables from BSTI.
 Health Certificate for Plant/Animal from Department of
Plant/Animal quarantine.
 NOC for medicine from Drug Admn.
 Certificate from explosive dept. for explosive/chemical.
 Agriculture Dept. Clearance for fertilizer/Insecticide.
 BTRC Clearance for mobile and telecom equipment.
 Phytosanitary Certificate for food grains.
 Survey Certificate for economic life-span of re-
conditioned machineries. 15
 Tariff Regulation under IPO
 Certificate from related trade association
(BGMEA, BKMEA,BTMA) for enjoying duty-free
or reduced rated import of Capital Machineries.
 Registration Cancellation Certificate for re-
conditioned vehicles.
 Block List from Drug Administration for
pharmaceutical raw-materials.
 Rules/Country of Origin Certificate for
preferential treatments like SAFTA or other
bi/regional treaties.
 Certificate/Undertaking from Ministry of Power,
Energy and Mineral Resources in case of Power
Sector Companies
16
 License for Import & Export
 Trade License from Local govt.
 TIN Certificate from Income Tax Dept.
 VAT Registration from VAT Dept.
 Import Registration Certificate(IRC)from CCI&E.
 Export Registration Certificate(ERC)from CCI&E.
 Opening of LC/LCA from AD Bank.
 Drug License & Block list from Drug Admn.
 Explosives License from Explosives Dept.
 Chemical License from Ministry of Home.
 Other formalities laid down in other Acts.
17
 Import General Manifest (IGM)
 Manifest submition : (Sec: 43-45)
- Person in charge of the conveyance
- or authorized agent (shipping agent/Airlines)
 Manifest contains :
- BL no/AWB no/Truck or Rail Receipt
- Name of importers, exporters
- No of packages/container, Weight, goods name.
- Date of departure & arrival
- Port of departure & destination
- Name of vessel, IMO no, nationality.
 Manifest to be submitted within 24 hrs of arrival of
vessel or 24 hrs before leaving the last port of call.
 Prior Entry in anticipation of arrival is allowed. 18
Procedure-1

19
Procedure-2

20
 Overview of Import Process
Submission of
IGM by shipping Bill of Entry Automatic Yes
agents / Airlines Submitted by Selection Go for
/ Transport C&F agent by AW. physical
Operator Are goods examination
risky?

Mis
Declaratio No
n found in
Go for Physical
Delivery
assessment. examination
stage? Releas Payment Examination report is sent
No e of Duties has to be to Assessment
Port Order/ conducted at Groups.
Yes Authority Exit release stage.
Clearance Note

Assessment is
conducted in
Release accordance
Release Order/ Payment with the
of Goods Exit of examination
Note Duties report.
 Major Steps in Clearance Procedure
 Import General Manifest(IGM) submitted by PC
or Shipping Agent - Manifest Registration.
 Declaration submitted by Importer or C&F Agent
- Registration of Bill of Entry.
 Physical Examination of goods where applicable
- Examination Report (Inspection Act).
 Examination report submitted to concern section.
 Documents submitted to concern section for duty
Assessment of goods - Document check by ARO.
 Assessment Completed - Assessment notice.

 Payment of Duties and Taxes – Release order.

 Release of goods – Exit note. 22
 Classification of Goods: H S Code

 Harmonized Commodity Description and

Coding System is an international commodity
classification (6 digit) developed by WCO.

 It can be extended up to 8 or 10 digits for

national Customs tariff and international
trade statistics purposes.

 It includes 21 sections and 98 Chapters,

organized from primary or raw product to
semi finished or finished product.

 Bangladesh uses 8 digit commodity code

(Bangladesh Customs Tariff -BCT).
23
 Valuation of Goods (sec-25)
 Purpose : Basis of assessment of total amount
of payable Duties and Taxes on goods.
 Follows: GATT (General Agreement on Tariffs
and Trade) valuation guidelines (Article VII).

 Transaction Value : Primary basis for Customs

value, ïé মূল্যায়ন (Avg`vwb c‡ণ্যর g~ল্য wbav©iY)
wewagvjv, 2000
[Gm,Avi,I bs- 57-AvBb/2000/1821/ïé, ZvwiL :
23/02/2000 wLªt]
 Transaction value of goods shall be the price
actually paid or payable or nearest
ascertainable value for the goods when sold 24
 Valuation of Goods
 Method-1: Transaction Value (rule-4)
 Method-2: Value of Identical Goods (rule-5)
 Method-3: Value of Similar Goods (rule-6)
 Method-4: Deductive Value (rule-7)
 Method-5: Computed Value (rule-8)
 Method-6: Fall back Method (rule-9)
 Other Methods of Value
 Minimum Value (MV) & Tariff Value (TV)[S-25(3)]
 Govt. Determined MV/TV by SRO no- 147/2022.
 Declared value accepted if higher than MV/TV.
 MV be increased considering brand, model, CoO.
 International journals/books (Yellow Book, Platts
London Metal Exchange-LME) be considered.
25
 Bill of Entry (sec-79)
1. Importer or Owner of imported goods shall submit
a Bill of Entry(B/E) in prescribed form with
necessary docs before clearing imported goods-
- for home consumption, or
- for warehousing, or
- for temporary import.

2. Bill of Entry should be submitted & goods be

cleared within 30 days (custom house/LCS) or
21 days (airport) of unloading of goods.

However, Commissioner may allow submission of

B/E even before goods arrive at the port and
expected to arrive within 30 days of such
submission.
26
Bill of Entry/Export
 Basic Information in B/E
 Customs station (1)  LC/LCA no (28)
 Importers name (8)  Bank code (28)
 Exporters name (2)  Duty & Taxes (47)
 C&F Agent (14)  Delivery term (20)
 Carrier of goods (18)  Load-Unload (27)
 Quantity/weight (38)  UP/UD/EXP (44)
 H. S. Code (33)  Goods description(31)
 Value of goods (22)  Country of Origin(16)
 Exchange rate (23)  Transac. nature (24)
CPC (37) Other information
28
 
 Docs. Required with Bill of Entry
(Circular no-120/2001/Cus Dt: 8.8.2001)

• Letter of Credit (LC)

• LCA (where applicable)
• Invoice, Packing List
• Proforma Invoice
• BL/AWB/Truck or Rail Receipt
• VAT Registration Certificate (BIN)
• Country of Origin Certificate (CO)
• Value Declaration Form
• Insurance Cover Note
• Documents for Tax Rebate or Exemption
• Other, as required by IPO/other Regulation 29
 Bill of Export (Section-131)

1. Exporter or Owner of exported goods shall

submit a Bill of Export (B/E) in prescribed
form and with necessary documents before
shipment of exported goods-
- for permanent export, or
- for export cum import.
2. Commissioner of customs may within a
period of 6 months require the exporter, who
submits B/E in customs computer system
(electronically), to submit a paper bill of
export as specify.

30
 Docs. Required with Bill of Export
(Circular no-120/2001/Cus Dt: 8.8.2001)

• Export LC/Contract/Order/Guarantee
• Invoice
• Packing List
• Country of Origin Certificate (CO)
• EXP form
• Other docs. as required by EPO
• VAT Registration Certificate (BIN)
• Other docs. as per other regulation
31
 Examination of Goods: Purpose

To verify authenticity of Declaration :

 Description of goods
 Quantity, Weight - matching with Invoice,
packing list, AWB, BL, Truck/Rail receipt.
 Art no, Part no, Model no, CC.
 Used, old or stock lot
 Expiry date where applicable
 Other compliance of IPO
32
 Examination of Goods

Selection for examination through Risk

Management
- Green Channel [No examination, for AEO]
- Blue Channel [No examination, PCA]
- Yellow Channel [Document Check, PCA]
- Red Channel [Physical Exam & Docs. Check]
Lab test for Chemical and other items/Raman
spectrometer
 PCA applies for certain cases

 Examination 10% to 20% depends on Customs

House/ Station.
 Assessing Officer’s Functions
Documents scrutinize (Invoice, PL, LC, BL etc)


Proper classification of goods (H.S. Code)



Valuation of goods


Importability (IPO)


 Examination or test report

 Check declared CPC
 Compliance of IPO
 Compliance of other regulations (IPR)
 Verify duty-tax benefit claimed
 Verify correctness of other documents
34
 Assessment of duty

First Appraisement [Sec-80(1)] :

Examination prior to Assessment
Once B/E is submitted, goods shall without
undue delay be examined or tested in
presence of owner and then be assessed to
duty and allowed for clearance.

Second Appraisement [Sec-80(2)]:

Examination after Assessment
Goods shall be assessed first and then
examination or test at the time of delivery.
If any misdeclaration found, goods will be
re-assessed. 35
 Provisional Assessment

Section 81(1) :
Goods will be assessed provisionally by an
Assistant Commissioner, if-

- it requires chemical or other test or a

further enquiry for assessment purposes.
- all or complete documents or full
information are not furnished.

Provided that the importer submits a

security or bank guarantee
36
 Provisional Assessment

Section 81(2) :
Once goods assessed provisionally, final
assessment should be made within 120
working days of provisional assessment
date, and security/bank guarantee be
settled on the basis of final assessment.

NBR may extend the period of

provisional assessment under exceptional
circumstances, recorded in writing.

37
 Amendment of Assessment
• Section 83A (1) :
Assistant Commissioner or above officer can
make amendment to assessment of duty/value
Section 83A (2) :
If it imposes liability to importer, he be given a
demand notice
Section 83A (3):
Due date of payment is 30 days from issuance
of notice
Section 83B (1)(2) :
Amendment of assessment has to be made
within 3 years of original assessment. If the
declaration was fraudulent or wilfully
misleading there will be no time limit. 38
 Tariff Structure
(Sec-18, first schedule)
(Highest rate on finished goods, lower rate
on intermediate products and lowest rate on
capital machinery/basic raw materials)

1. Finished products 25%

2. Intermediate products; 10%, 15%

Also Basic Raw materials that
have Production

3. Basic Raw materials that do not 5%

have domestic production

4. Capital machinery/Basic RM 0%, 1%

Duty-Tax & Charge Applicable
(Sec-18)

Customs Duty (CD)

Regulatory Duty (RD)
Supplementary Duty (SD)
Value Added Tax (VAT)
Advanced Income Tax (AIT)
Advanced TAX (AT)
Surcharge

40
 Tariff/Duty Calculation
• Ad-Valorem tariff: Customs duty is calculated
as a percentage of the value of the product
(25% CD on value of a Car).

• Specific tariff: Fixed amount of money per

unit of product (Tk. 500/MT of cement).

• Mixed tariff: Combination of ad-valorem &

specific duty which generate higher/lower
revenue (Tk.50/watch or 10% CD whichever is
higher/lower)
• Compound tariff: Include both ad-valorem &
specific tariff (Tk.30/kg of nut plus 10% CD on
value of nut)
41
 Ad Valorem Value Calculation
 Free on Board(FOB):
Price of the product on board a Vessel at the
time of embarkation
 Cost & Freight(CFR):
Price that include FOB price and the
transportation cost from the country of
exportation to the country of importation
 Cost, Insurance & Freight (CIF):
Price that includes insurance & freight of the
product up to the port of entry
EXW : Ex works,
42
 Assessable Value
FOB price
+ Freight
[actual or 20% of FOB Value if actual unavailable,
(15% of IATA published freight charge for Air-Ref:
S.R.O no-129-law/99/1792/cus, dt: 10.06.99)]

= CFR Price
+ Insurance Fee
(actual fee or 1% of CFR Price )

= CIF price
+ Landing Charge
(Landing Charge=1% of CIF Price )
= Assessable Value
43
 Calculation of Duty & Taxes
(Sec-80)

Duty & Tax Calculation Method

CD =Assessable Value x CD rate
RD =Assessable Value x RD rate
SD =(Assessable Value+CD+RD) x SD rate
VAT=(VAT-able Price) x VAT rate
AIT =Assessable Value x AIT rate
AT =(VAT-able Price) x AT rate
SC = Assessable Value x SC rate
VAT-able Price= Assessable Value+CD+RD+SD
44
 Total Duty and Taxes on Import
Calculate total duty and taxes on import of one motor car that
cost Tk 5,00,000 CFR. Duties on the vehicle are CD 25%, RD
20%, SD 100%, VAT 15%, AIT 5%, AT 5% & SC 2%.
Assessable Value (AV)=
CFR Price = Tk. 5,00,000.00
CIF Price =CFR Price+Insurance (1% of CFR)=Tk. 5,05,000.00
AV= CIF Price+Landing Charge (1% of CIF) = Tk. 5,10,050.00

Customs Duty(CD) 25% Tk. 1,27,512.50

Regulatory Duty(RD) 20% Tk. 1,02,010.00
Supplementary Duty(SD) 100% Tk. 7,39,572.50
Value Added Tax(VAT) 15% Tk. 2,21,871.75
Advance Income Tax(AIT) 5% Tk. 25,502.50
Advance Tax (AT) 5% Tk. 73,957.25
Surcharge 2% Tk. 10,201.00
---------------------------------------------------------------------------
Total duty & taxes on the car = Tk. 13,00,627.50
---------------------------------------------------------------------------
Total landed price of the import = Tk. 18,10,677.50
 Duty, Value & Exchange Rate (Import)
(Sec-30)

 Duty rate, value & exchange rate applicable to any

goods, shall be the duty rate, value and exchange rate
in force-

 (1) in case of goods cleared for home consumption

under sec-79, on the date a BE no is allocated;

 (2) in case of goods cleared from a warehouse for

home consumption under sec-104, on the date a BE
no was allocated under sec-79 ; and
 (3) in case of any other goods, on the date of payment
of duty:
 Provided that if a BE is presented in anticipation of
arrival of a conveyance, relevant date shall be the date
on which manifest is delivered.
46
 Duty, Value & Exchange Rate (Export)
(Sec-31)

 Duty rate, value & exchange rate applicable to

any exported goods, shall be the duty rate,
value and exchange rate in force-

 (1) under sec-131, on the date a Bill of Export

(BE) is submitted and a BE no is allocated
thereto;
 (2) where export of any goods is permitted
without BE or in anticipation of delivery of
such BE, the date on which loading of the
goods on the outgoing vessel commences.
47
 Export Tariff / Duty
(Sec-18, first schedule)

 Export duty is applicable only on the

following items-
SL no H. S. Code Description of Goods Export Duty

1 2302.40.10 Rice Bran 25%

2 5202.99.10 Cotton Waste 25%

3 6904.10.00 Building Bricks 15%

4 7801.10.00 Unwrought Lead 25%

7801.91.00
7801.99.00
48
 Other Duties
 Countervailing Duty(S-18A): Imposition
of duty not exceeding the amount of subsidy
allowed by the Govt. of the exporting country.

 Anti-dumping Duty(S-18B): Imposition of

duty not exceeding the margin of dumping in
relation to goods which are exported from
other country to Bangladesh less than the
normal value.

 Safeguard Duty(S-18E): Imposition of

duty on any article being imported into
Bangladesh in such quantities/conditions that
cause serious injury to domestic industry. 49
 Clearance of Goods

Section-83(1): Release order for imported

goods will be given when applicable total
duty-tax is paid.

Section-83(2): An importer or a class of

importer may be allowed clearance without
any release order.

Section-80(3): Government may exempt

any goods or a class of goods from the
requirement of physical examination (As is
done under the PSI system)
50
 Transshipment & Transit
 Transshipment of Goods(S:121-124):
Transfer of imported goods from any
customs-station to some other customs-
station or any foreign destination. Duty will
not be charged at the customs-station of
transshipment.

 Transit(S:127-129): Transfer of imported

goods in the same conveyance to a customs
-station in Bangladesh or any destination
outside Bangladesh without payment of duty.

 Fee (S:125,129A): : Transshipment or

Transit fee on any goods may be levied at
such rates, according to weight, quantity. 51
 Customs Auction
Section-82(1):
Goods will be auctioned, after serving due
notice to the owner, if they are not cleared
or entered into home consumption or
transshipped within 30 days (custom house
or LCS) or 21 days (airport) of unloading of
goods.
However-
1. Animals/perishables/hazardous goods
may be sold immediately.
2. Arms, ammunition or military stores may be
sold or disposed off at such time and such
manner specified by NBR. 52
 Customs Auction
Acceptance of Bid:
1. Allow sale at first auction, if 60% of reserve
value covered.
2. Allow sale at second auction, if bid is higher
than first auction.
3. Allow sale at third auction whatever it is
the bid.
Section 82 (2):
Sale proceeds is distributed according to
Section 201. However, if there is any
complication or court case, the proceeds
should remain in government treasury and
be distributed after the case is settled. 53
 Customs Auction
Section-201:
Sales proceeds to be distributed in the
following manner-
(a) First to pay expense of sale.
(b) Then to pay freight/other charges.
(c) Then to pay duty and taxes.
(d) Then to pay charges of custodian.
(e) Then to pay owner of the goods if he
applies within six months of auction.
54
THANK YOU SO MUCH

ANY QUESTION ?

55