Apparel exporters alleged that complex procedures to avail VAT exemption on services, offered by off-docks and ports, are hindering smooth export-import activities.
Export-oriented sectors are exempted from payment of VAT, but they need to obtain certification from VAT offices as evidence of the waiver.
Recently, Chattogram VAT office issued demand notices to the ports and off-docs, claiming VAT on their services - provided to the exporters, due to not having VAT exemption certificates.
M A Hatem, first vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), alleged that the government is imposing such barriers in recent times, causing difficulties for the exporters to stay competitive in the international market.
"We have requested the National Board of Revenue (NBR) to remove the procedural complexities, as the duel procedures are unnecessary taking time," he added.
In the letter, the BKMEA said 100 per cent export-oriented sectors are exempted from payment of all types of VAT, including VAT on port-related services, as stated by the NBR orders on June 13, 2019 and March 03, 2018.
However, as per another order of the NBR, dated September 26, 2019, the exporters have to submit VAT exemption certificate to the private inland container depots (ICDs) and ports before exporting their products.
"The mandatory provision of submitting certificate to the private ICDs is causing hindrances to expedite export activities. It is not expected in this crisis period," the BKMEA letter said.
According to the World Trade Statistical Review 2021, released on July 30 by the World Trade Organisation (WTO), Bangladesh's share in the global apparel market dropped to 6.3 per cent in 2020 from 6.8 per cent a year earlier.
The government offered a wide range of fiscal incentives to help the apparel exporters stay competitive in the international market.
The exporters said some of the procedural complexities to avail the fiscal incentives are causing harassment and delay in meeting lead time.
The customs authorities conduct assessment of an export-oriented industry after scrutinising its Business Identification Number (BIN), computer-generated bond licence member certificate of the BKMEA, Utilisation Declaration and other documents, for confirming that it is VAT exempted.
The exporters are currently releasing their products from the Chattogram Port and private ICDs on the basis of those documents.
They are not required to produce VAT exemption certificate from VAT offices to the customs authorities.
Mr Hatem said the VAT authorities have started asking for the certificate in recent times.
He opined that rather than simplifying the process the government is making it more complex, which might leave adverse impact on the country's doing business index.
A senior VAT official, preferring anonymity, said they have taken the steps as per the NBR order, issued on 2018.
He noted that the order remained unnoticed earlier, but the VAT offices are bound to comply with it.
"We have asked the port authorities and off-docs not to allow exporters enjoy VAT exemption on different services without certification of the VAT commissioner concerned."
The services providers have to collect VAT at a rate of 15 per cent with the service charges, if the exporters fail to furnish the certificate, he added.
Some 19 off-docks are handling all of the country's export products.
Recently, the NBR allowed the off-docks to handle all of the import products until August 31 to ease pressure on the Chattogram Port.
Earlier, they were allowed to handle 38 types of import products, mostly non-ready-made garments.
In April 2020, the customs allowed transfer of containers of all import items to the private ICDs following an acute congestion in the port due to lockdown. Until June 30, 2020, the off-docks handled more than 78,000 TEUs of containers.