Strengthening customs for enhanced trade
Image: Collected
Bangladesh features seen a significant upsurge in cross border transactions during the last decade -- triggering a great energized involvement by the customs authority. This growth of trade necessitates our rules happen to be conducive and that devices are improved to meet and maintain global standards.
Bangladesh follows the Customs Action 1969 which has seen some occasional amendments. As the customs authority provides considered some commendable initiatives, professionals even now see scope for undertaking extra to smoothen trade and improve ease of doing business.
Good agreement on implementation of Article VIII of the overall Agreements on Tariff and Trade, 1994 (GATT), National Board of Earnings (NBR) has issued an SRO Very little-57-AIN/2000/1821/Customs dated Feb 23, 2000 to determine the value of imported goods.
The SRO states that the value of the imported goods will be equal to the transaction value. Relating to Rule, only once the transactional value isn't ascertainable, can additional valuation functions be followed, which include transaction value of similar goods; transaction worth of similar things; deductive value; computed worth; residual method and also to be adopted in sequential order.
Used, however, there are occurrences when this well-identified provision is not followed while determining the value of imported goods, even if the transaction value is offered by enough time of import and the parties aren't related.
Oftentimes, valuation is done based on database (ASYCUDA) value available with the authority considering identical or similar goods imported into Bangladesh recently. This brings about a violation of the valuation rules and benefits in a rejection of purchase value. The arbitrary valuation, based on the database worth, results in an increase in the expense of imported goods due to an excess payment of import duties and therefore an increased price of the products in the neighborhood market.
An upward arbitrary valuation during import may increase earnings for the government, however the eventual expense is borne simply by the consumers in the neighborhood market. NBR should remove any arbitrary valuation by issuing appropriate clarification directing the implementing customs wing to follow the valuation guidelines issued.
In Bangladesh, Transfer Prices provisions were introduced in 2014 and the upward valuations by the customs contradicts the objectives of the Transfer Prices policy. While customs tends to calculate upward valuation, Transfer Prices leans towards downward valuation. In order to avoid such contradiction between the different wings of the apex earnings collection authority, NBR may issue a collaborative guideline to consider Transfer Prices value during import.
It must be noted that today's classification of customs tariff is founded on the 2007 edition of the WCO (World Customs Business) Harmonized System(HS) Nomenclature. There are 7,196 tariff lines categorized at the HS eight-digit level, in comparison to 6,637 in 2006.
Today's customs tariff classification is not completely aligned with the HS nomenclature of 2017 edition that was published by WCO beneath the International Convention on the Harmonized Commodity Description and Coding System, effective January 1, 2017. As a result, in many instances, the HS code provided by the exporting countries following WCO HS nomenclature will not meet the corresponding HS code obtainable beneath the Bangladesh Customs tariff.
Owing to the disparity in corresponding HS code posted under the Bangladesh Customs Tariff, importers experience troubles in classifying their imported merchandise, which causes disputes with the authority. The difference of tariff classification as well creates disagreements regarding eligibility of various benefits available under distinct No cost Trade Agreements like SAFTA, AFTA etc.
It is necessary that Bangladesh Customs tariff aligns with the WCO published HS nomenclature, used worldwide for the uniform classification of items traded internationally, and that is accepted by all contracting parties to the Harmonized Program Convention. A new WCO Harmonized Program Nomenclature will be applied from 2022. It really is about time that Bangladesh Customs Authority consider the opportunity and be aligned with the global HS nomenclature to get introduced in 2022.
Moreover, Section 219A good of the Customs Act, 1969, provides the chance of advance ruling regarding classification of goods, duty costs, and valuation of products. In 2016, customs authority issued Customs Rulings (Progress) Guidelines, 2016, notified vide SRO No.188-AIN/ 2016/ 37/ Customs dated June 2, 2016, which opens the opportunity of advance ruling associated with classification of goods and country of origin.
It generally does not provide scope of progress ruling in relation to valuation of items even if the Action provides such scope. While the advance ruling on classification of merchandise is available since June 2, 2016, the NBR is but to introduce the facility of advance ruling associated with valuation of goods, leading to unneeded dispute in the valuation of products.
Import from a related party requires special valuation for which a particular Valuation Bench (SVB) exists in lots of countries. In the lack of such SVB and facility to seek advance ruling with regards to the valuation of items imported from related functions, the importers face issues of arbitrary valuation by the authority.
We hope the customs authority, in line with the government manifesto of increasing ease of doing business to bring in overseas investment into Bangladesh, can make important modification to existing practice and rules to remove the needless problems faced by the importer at the time of import of goods.
The NBR has taken some commendable steps to smoothen trade. As a part of customs modernization and trade facilitation job, it'll roll out the National Solitary Window in Bangladesh to make sure all foreign trade related customs methods through an individual window.
The project will transform international trading procedures by adopting a user-friendly system that streamlines and automates procedures for all international trade related permits, licenses, and customs declaration, resulting in significant reduced amount of time and cost of trade.
The World Trade Company (WTO) continues to advise changes to customs regulations. Amidst that changing scenery, Bangladesh must maintain a balanced, uniform, and forward-looking methodology. Complexities in trading habits are the norm nowadays with shipments planing a trip to and from multiple spots and changing hands multiple instances. This displays the globalized mother nature of modern corporations, which run different businesses in various countries.
By working smarter, being cognizant of WTO ideas and globally accepted methods, and using technology, we can better serve our local and global companies to tackle new difficulties in an ever-evolving horizon and support trade move smoothly.
Our country’s trustworthiness of having an efficient and un-obstructive system depends on customs regulations simplification and stems from our ability to establish Bangladesh while a good secure and trusted node found in the global source chain, in order that others would want to trade with us.
Source: https://www.dhakatribune.com
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