Process eased for incentives on light engineering exports

The Bangladesh Bank (BB) has made it easier for export-oriented light engineering industries to get incentives against their export earnings for the Fiscal Year 2021-22.

Under the previous system, an exporter had to apply for incentives within 180 days of their export income repatriation. From now on, exporters will be able to apply for incentives within 180 days from the day of shipment.

The Bangladesh Bank’s Foreign Exchange Policy Department (FEPD) issued a circular in this regard on Wednesday. It refers to another FEPD circular issued on February 28, 2006, which had made only four categories of light engineering products eligible for export incentive.

These eligible products are – the carbon rods for battery, D-size battery, AA-size battery and locally manufactured glassware, manufacturing machinery, moulds and parts.

Exporters are getting 15 per cent in centive under the condition that their products feature value addition of at least 50 per cent. However, this incentive will not be available to exporters who are already getting bond and duty back benefits on goods imports.

Before an exporter can realise this incentive, a regulator-appointed firm will audit the account against each application for verification and accuracy.

The 2006 circular also mentions that the central bank can take necessary action against any bank official if they are found involved in any irregularities regarding the payment of incentives.  

Bangladesh’s export earnings from the light engineering sector grew a remarkable 58 per cent to $489 million during the July-January period of FY22, when compared year-on-year.