Presentation

on
Licensing and Bonded Goods
Management, Offence and Penalties

Dr. Abu Nur Rashed Ahmed

Additional Commissiner
National Board of Revenue, Dhaka

12 March, 2020
www.cbc.gov.bd
1
 Bonded Warehouse

• Bonded warehouse means any warehouse

where goods are kept without paying duties
& taxes, after getting license from the
Commissioner of Bond or any other
Commissioner authorized by NBR
• Condition for Export
Benefits
• Enable competitiveness in the export market
• Foreign Remittance
• Employment Generation
 Bonded Warehouse & its legal
background
• Legal Provision is given under Section 12 &
Section 13 of The Customs Act, 1969
• Bonded Warehousing facility: provisions
under Sections 84-119 of the Customs Act,
1969 (Chapter 11)
• Considerable number of SROs/standing
orders/office orders/resolutions
Types of Bonded Warehouse
 Types of Bonded Warehouse Number of Bonded
License, Dhaka Bond Warehouses
Garments Bond 4506 (Active 2392)
Accessories Bond 1836 (Active 1294)
Diplomatic Bond 7 (Active 7)
Duty Free Shop 19 (Active 15)
Home Consumption Bond 52 (Active 14)
Supervised Bond 135 (Active 95)
Bonded Warehouse Located in Two 199 (Active175)
EPZs
Total 6753 (Active 3991)
Garments Bond Division - Dhaka and Mymensingh
Division

Accessories Bond Division – Dhaka and

Mymensingh Division

Supervised Bond Division – Encompasses the entire

geographical territory of Bond, Dhaka

Dhaka EPZ – Dhaka EPZ (East) & Dhaka EPZ

(West)

Adamjee EPZ – Adamjee, Narayanganj

Getting a Bond
License
 Lodgment of Application

Collect the application form from Customs Bond

Commissionerate or download it from Website

Submit the dully filled up form along with necessary

documents

Attach necessary documents along with the application

as per Bonded Warehouse Licensing Rules, 2008

Some extra documents may be required depending on

the type of industry
 Licensing Rule

• Bonded Warehouse Licensing Rules, 2008 specifies the

procedures, documents and fees required for license.  
• The authorization is of general kind (general bond) and
not consignment basis.
• License is renewed automatically for every two years
after submission of required documents through
business association
• Audit is to be performed each period
 General Bond
• Section 86 of the Customs Act, 1969

• Deemed Exporter: 1 Crore Taka

• Direct and Indirect Exporter: 2 Crore Taka
• Direct Exporter: 3 Crore Taka
• Diplomatic, Duty Free, Duty Paid: 3 Crore Taka
 Bonding Period
• Section 98 of the Customs Act, 1969
• Raw Materials (RM) should be exported
within/extended bonding period
• For 100% Export Oriented Industry (Direct/
Indirect) 24 Months (Extension: 6 months by
Commissioner + 3 Months by Board)
• For Diplomatic Bond 12 Months
• For export oriented ship builders – 48 Months
• For others – 6 Months
Administrative work of 100% Percent export
oriented Garments Industry
Administrative work of Deemed Exporters
 Bond Register
• In-bond and Out-bond Information
• Maintained by Bond Officer at Warehouse

Seria Date of Name of Invoice No. Airway/ Bill of Description Number of Quantity Value Duty
l No. Issue & Suppliers & Date or Shipping Entry of Goods packages & Involved
Received Bond No. Bill No. No. & Cases etc.
Date

1 2 3 4 5 6 7 8 9 10 11

  Ex- Signature Signature Remarks

bond of the In- of the
Issues Balance
bill charge of Customs
  no. & Warehou officer In-
Advice To Descrip No. of Qua Valu Duty Descriptio No. Quan Value Duty Consi se Charge
no. & whom tion of package ntit e Involve n of of tity Involved
gnee
Date supplie Goods s& y d Goods pack
d supplie cases ages
d etc.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
 Role of export related Industries on our economy

Bangladesh is the Second largest apparel

exporter in the World
Policy Support and revenue expenditure for
Band facilities to promote export
Major Challenges regarding Bond Management
 Misuse of bonded warehouse facilities

Bond Licensees sometimes misuse this bonded facilities

by supplying the duty free RM to the local market which
created instability in the market
legitimate traders, who do not have bonded warehouse
facility, are facing imperfect competition in the local
market

government depriveed from legitimate revenue which

may negatively affects the development
 High Risk Commodities

Any commodity imported under bond is high risky if

- Duty Tax is high

- Has local demand of it or it’s product

- Inadequade supervision
Example: Oven fabrics has high demand and heavy winter cloths
have low demand in Bangladesh.
Artificial hair has no demand locally. So such industry are less
risky.
 Bond Management
• Issuing UD/UP
• Preventive activity/ Stock checking
• Audit
• Entitlement
• General Bond
 Audit
• Paper Based
Thing to be noted:
 Import-Export Performance
 Raw Material Consumption as per Coefficient
 Expired Raw material
 Short Shipment/ Export Failure
 Minimum Value Addition
 Foreign Currency Realization
 Common Type of Misuse

• Import of raw materials in excess of Annual Import

Quota
• Importing RM in access of Bonding Capacity
• Importing RM in access of Production Capacity (at
EPZ)
• Using RM more than that permitted by the input-
output coefficient
• Imported items not included in the Bond Register
 Common Type of Misuse

• Submitting fake or manipulated documents while

taking permission for utilization (UP)
• Using RM without having Input-output Coefficient
• Export goods without UP or UD
• Using expired RM
• Actual stock is different from Bond Register
 Examples of Common Type of Misuse

 Number of Garments in UD 5,40,000 and demanded

polybag 7,15,200
 Number of Garments in UD 66,143 and demanded
Cartoon 2750 of size 55x40x15 cm (Shirt 2.9 per Cartoon)
 In UD, the size of polybag for shirt is 40 x26 inch, which is
beyond justification
 In UD, 2,38,500 hangers for 1,08,560 garments
 Demanded Chemical (Softener) when there is no dying or
washing plant
 Import heavy duty fabrics and export garments with less
costly local fabrics
 How to Detect Leakage

• Preventive Work (Roadside/ Potential Market/ Temporary

Storage etc.)
• Stock Taking at Warehouse
• Cross-checking of document from Customs House, Bank,
and Direct and Indirect Exporter)
• Physical Verification of Product or Output
• Investigation
• Audit (Annually)
• Information sharing
• Engaging Informer
 Way forward to Prevent misuse of Bond Facility

Proper Monitoring

Effective Audit

Awareness Building for Self Compliance

Full Automation of Bonded Warehouse System

 Offence and
Penalties
Section 156 (1) of the Customs Act contains provision for penalties.

Sl Offences Penalties Related

Section
1 If any person contravenes any Not exceeding 50,000 taka General
provision of this Act or any rule
made thereunder, or abets any
such contravention or fails to
comply with any provision of this
Act or any such rule with which it
was his duty to comply, where no
express penalty has been provided
elsewhere for such contravention
or failure.
 Offence and
Penalties
Sl Offences Penalties Related
Section
12 if any person commits an offence penalty not exceeding three 32
under section 32 times the value of the goods and
such goods shall also be liable to
confiscation; and

upon conviction by a Magistrate

such person shall further be
liable to rigorous imprisonment
or a term not exceeding five
years or to a fine not exceeding
taka fifty thousand or to both
 Offence and
Penalties
Sl Offences Penalties Related
Section
49 If any goods entered to be The person shall be liable to a 87
warehoused are carried into the penalty not exceeding 50,000
warehouse, unless with the authority, taka and such goods shall also
or under the care, of the appropriate be liable to confiscation.
officer, and in such manner, by such
persons, within such time, and by such
roads or ways, as such officer directs,

50 If any goods entered to be such goods shall be deemed 88

warehoused are not duly warehoused not to have been duly
in pursuance of such entry, or are warehoused, and shall be
withheld, or removed from any proper liable to confiscation
place of examination before they have
been examined and certified by the
appropriate officer
 Offence and
Penalties
Sl Offences Penalties Related
Section
51 If any warehoused goods be such goods shall be liable to Chapter
not warehoused in confiscation and a penalty twice the XI
accordance with the value of the goods shall also be
provisions of Chapter XI imposed;
and upon conviction by a Magistrate
such keeper shall further be liable to
rigorous imprisonment for a term not
less that three months but not
exceeding two years
51 If any person misuses A penalty twice the amount of duty Chapter
A warehouse facilities for and tax evaded shall be imposed on XI
evading payment of customs such person;
duties and taxes leviable and he shall also be liable to rigorous
thereon imprisonment for a term not exceeding
five years by a Magistrate.
 Offence and
Penalties
Sl Offences Penalties Related
Section
52 If the licensee of any private such licensee shall be liable to a 91
warehouse licensed under this penalty not exceeding one lac taka,
Act does not open the same and shall further be liable to have
when required so to do by any his license forthwith cancelled
officer entitled to have access
thereto, or, upon demand made
by any such officer, refuses
access to any such officer
 Offence and
Penalties
Sl Offences Penalties Related
Section
54 If the owner of any warehoused such owner of person shall in every 93
goods, or any person in the such case, be liable to a penalty not
employ of such owner, exceeding fifty thousand taka
clandestinely opens any
warehouse, or, except in the
presence of the appropriate
officer, gains access to his goods
55 (i) If any warehoused goods such goods shall be liable to 92 & 94
are opened in confiscation.
contravention of the
provisions of section92; or
(ii) if any alteration be made in
such goods or in package
thereof, except as provided
in section 94
 Offence and
Penalties
Sl Offences Penalties Related
Section
56 If any warehoused goods that the person-in-charge of the 106
have been delivered as stores conveyance shall be liable to a
and provisions for use on board penalty not exceeding fifty thousand
a conveyance under the taka and such goods shall also be
authority of this Act are liable to confiscation.
relanded, sold or disposed of in
Bangladesh]without due entry
and payment of duty
57 f any goods lodged in a private the licensee of such warehouse 116
warehouse are found at the shall, unless the deficiency be
time of delivery therefrom to be accounted for to the satisfaction of
deficient, and such deficiency is the appropriate officer, be liable to
not due solely to natural loss, as a penalty equal to five times the
allowed under section 110 duty chargeable on the on the
goods so deficient.
 Offence and
Penalties
Sl Offences Penalties Related
Section
58 If the keeper of any public such keeper or licensee shall, 116
warehouse, or the licensee of any for every such failure, be liable
private warehouse, fails, on the to pay the duties due on such
requisition of any officer of customs, goods, and also a penalty not
to produce any goods which have exceeding two thousand five
been deposited in such warehouse, hundred taka in respect of
and which have not been duly every package or parcel so
cleared and delivered therefrom, and missing or deficient
is unable to account for such failure
to the satisfaction of the appropriate
officer
 Offence and
Penalties
Sl Offences Penalties Related
Section
59 If any goods, after being duly any person guilty of such removal, Chapter
warehoused, are fraudulently conceal-ment, abstraction or XI
concealed in, or removed from transferment and every person
the warehouse, or abstracted aiding or abetting him shall be liable
from any package or transferred to a penalty not exceeding 50,000
from one package to another, taka
or otherwise, for the purpose of
illegal removal or concealment
60 If any goods lodged in a private charged with not exceeding three Chapter
warehouse are found to exceed times the duty leviable thereon XI
the registered quantity,
 Offence and
Penalties
Sl Offences Penalties Related
Section
61 If any goods be removed from the any person so removing them Chapter
warehouse in which they were shall be liable to a penalty not X
originally deposited exceeding 50,000 taka and such
goods shall also be liable to
confiscation.

62 If any person illegally takes any penalty not exceeding twice the Chapter
goods out of any warehouse value of the goods, X
without payment of duty, or aids, and upon conviction by a
assists or is otherwise concerned magistrate shall further be liable
therein to rigorous imprisonment for a
term not less than three months
but not exceeding two years
 Offence and
Penalties
Sl Offences Penalties Related
Section
90 If any person, without lawful excuse, acquires such goods General
possession of, or is in any way concerned in carrying, shall be liable
removing, depositing, harbouring, keeping or to confiscation
concealing, or in any manner dealing with any goods and any person
which have been unlawfully removed from a concerned shall
warehouse, or which are chargeable with a duty also be liable to
which has not been paid, or with respect to the a penalty not
importation or exportation of which there is a exceeding five
reasonable suspicion that any prohibition or times the value
restriction for the time being in force under or by of the goods.
virtue of this Act has been contravened, or if any
person is in relation to any such goods in any way,
without lawful excuse concerned in any fraudulent
evasion or attempt at evasion of any duty chargeable
thereon
Than
k You
42