Exporters exempted from stamp duty on differed payment

Exporters have finally received exemption from 0.20 percent stamp duty against the bill of exchange on deferred or issuance payment based export.

A bill of exchange is a written order once used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date.

The Bangladesh Bank on Monday sent an instruction to the banks dealing with foreign currency to take necessary action in this regard.

The finance ministry had earlier sent a letter to the central bank with observations that according to the rules, stamp duty is applicable on importers, not exporters.

But earlier, the exporters had been forced to pay the stamp duty. The finance ministry took the initiative to reduce the duty burden as claimed by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Speaking on the duty exemption, BGMEA President Rubana Huq said it will relieve the apparel exporters from some additional costs.

"Bangladesh incorporated the provision of stamp duty on the export bill of exchange value from the 1899's Indian Act. However, the Indian government currently imposes that only on the import bill of exchange," she added.

Bangladesh Knitwear Manufacturers and Exporters Association First Vice-President Mohammad Hatem told The Business Standard that the provision was incorporated into the finance bill in 2012.

"But no one was aware of the duty. Five years later in 2017, the authorities asked authorised banks to realise the arrear duties with interest," he added.

Then the apparel exporters expressed their concerns and challenged the provision, said the BKMEA vice-president.