Bangladesh Customs, National Board of Revenue (NBR)

Bonded Warehouse Links

Bonded Warehousing means the facility provided to export oriented industries for importing inputs/raw materials and packaging materials without paying any duty or taxes. The National Board of Revenue (NBR) provides Bonded Warehousing benefits to a wide range of industries to encourage export oriented industrialization and facilitate exports. Availing the bonded warehouse facility is important for the export-oriented industries, as it enhances their export competitiveness.

Bonded Warehousing facility is accorded following the provisions under Sections 84-119 of the Customs Act, 1969 (Chapter 11), and various rules and orders issued from time to time by the NBR. There are a considerable number of SROs/standing orders and office orders issued by the NBR and the Customs Bond Commissionerates to effectively supervise bonded warehouse activities.

Bonded Warehousing facility is enjoyed by both direct exporters and deemed exporters. ‘Deemed exporters’ are those industries that do not have any direct export operations, and instead carry out their activities through subcontracting and receive their proceeds in foreign exchange through local back-to-back letters of credit.

Categories of Bonded Warehouses: Depending on the types of inputs/raw materials used, the purpose of their use, and the type of exports, bonded warehouses are basically of two categories: Special bonded warehouse and general bonded warehouse.

(1) Special bonded warehousing is applicable for 100% export-oriented readymade garments industries, which include woven garments, knitwear and sweater manufacturing industries.

(2) General bonded warehousing applies to other 100% export-orient oriented industries. These include-

(a) 100% export-oriented ship building industry,

(b) Accessories industries for :

(i) Deemed exports (e.g. 100% export-oriented packing/carton, label, polybag, button, hanger etc. firms), and

(ii) Direct exports.

(c) General Bonded Warehouse for home consumption e.g. British American Tobacco. These are basically deferred payment facility for 6 months. Duties are paid when raw materials/goods are cleared.

(d) Diplomatic & privileged persons bonded warehouse (e.g. M/s Toss Bond (Pvt) ltd., M/s H Kabir & Co. Ltd; Biman Bangladesh Airlines; Bangladesh Parjatan Corporation). Duty free articles are sold from these bonded warehouse in foreign currency to diplomats &privileged persons residing in Bangladesh.

(e) Bonded enterprises situated in the Export Processing Zones.

(f) Bonded enterprises situated in the Economic Zones.

(g) 100% export-oriented deemed-to-deemed export industries.

Facilities enjoyed by bonded enterprises situated in the Export Processing Zones are delineated in the Customs (Export Processing Zones) Rules, 1984.

To download the Customs (Export Processing Zones) Rules, 1984, click here.

Bond License: In order to avail the Bonded Warehousing facility, interested enterprises will have to take a Bond License from the Customs Bond Commissionerate. Bond Licenses are issued and maintained as per the Bonded Warehouse Licensing Rules, 2008.

To download the Bonded Warehouse Licensing Rules, 2008, click here.

To download the 100% Export Oriented Industries (Temporary Importation) Rules, 1993, click here.

In order to obtain a bonded warehouse license, applicants need to complete a bond license application form and submit the same with necessary documents and application fee to the respective Bond Commissionerate, or any Customs, Excise and VAT Commissionerate authorized by the NBR to issue bonded warehouse license.

To download the bond license application form, click here.

To download the list of necessary documents to be submitted along with the bond license application, click here.

After receiving the Bond Licenses, licensee industries will be able to take clearance of their inputs/raw materials or packing materials imported under Back-to-Back Letter of Credit without paying any import duty or other taxes. However, the volume of these inputs and packing materials will have to remain within the limits of the entitlements referred to in their Bond Licenses. Full duty and taxes will be applicable on any amount of inputs/raw materials that exceed the entitlements referred to in the Licenses.

Bond Entitlement: Bonded warehouse facilities are subject to yearly entitlement. Yearly entitlement is allowed based on production capacity of capital machinery and previous year’s performance (i.e. export and usage of raw materials) of the bonder. However, direct exporters in the RMG sector are not required to have annual entitlement. They can import inputs/raw materials and related items based on the requirement of Utilization Declaration (UD) and Master LCs. Entitlement of raw materials required are determined using input-output coefficient.

Requirement of General Bond: Bonded warehouse license holders are needed to submit general bond of differing values to Customs in order to clear their consignments. Commissioner of Customs may increase the value of General Bond. At present, value of general bond for different types of bond license holders are as follows:

(a) Deemed Exporter: Tk. 10,000,000
(b) Direct exporters (Knit, Woven, Sweater): Tk. 30,000,000
(c) Both Deemed and Direct Exporter: Tk. 20,000,000
(d) Diplomatic, Duty Free and Duty paid Bond: Tk. 30,000,000

All the imported goods cleared under Bonded Warehouse license are stored at the bond holder's warehouses. In case of failure to export, importers are to pay duty charges and taxes for the rest of the goods imported. Bond holders are required to maintain bond registers and other documents. Bonded warehouses are subject to mandatory yearly audit.

Bonding period: For export-oriented industries, bond period varies from industry to industry. Bonding periods are shown below:

Bonded warehouse types	Bonding period
Special Bonded Warehouse	24 Months; Commissioner reserves the power to extend the bonding period for a maximum of 6 months
Direct Exporter	24 Months; Commissioner reserves the power to extend the bonding period for a maximum of 6 months
Home Consumption Bond (e.g. British American Tobacco, Hayes and Haier, Meghna, Citi group, TK)	6 Months; Commissioner may extend the bonding period for 3 months and NBR may further extend the bonding period for 3 months
Deemed Exporter	24 Months; however, Commissioner reserves the power to extend the bonding period for a maximum of 6 months
Diplomatic and privileged persons Bonded warehouse	12 Months; Commissioner may extend the bonding period for 3 months and NBR may further extend the bonding period for 3 months
Ship Builders Bond	48 Months; bonding period is extendable.

Import under UD/UP: How much inputs and packaging materials will be used in manufacturing exportable products is basically determined by the Utilization Declaration (UD) or the Utilization Permission (UP). In the case of readymade garments industries, the UD issued by Bangladesh Garments Manufacturers and Exporters Association acts as the basis. In the case of other export-oriented industries, the UP issued by the Customs Bond Commissionerates acts as the basis. This UD or UP is finally settled after the manufactured products are exported.

To download the Production Coefficient and Utilization Declaration Form, click here.

To download the Utilization Permission Application Form, click here.

To download the Utilization Permission Format, click here.