Govt moves to end NBR-exporters row

Senior officials of the commerce ministry, the National Board of Revenue and the central bank will sit today to end the dispute that emerged after garment exporters were barred from enjoying cash incentives on overseas sales if they don't have the bonded warehouse licences.

More than 700 garment exporters do not have the licences, which allow factories to import raw materials duty-free in order to produce products for the export markets.

Exporters argue that many garment factories have been selling products abroad for many years and receiving cash incentives on the receipts despite not having the licences.

But last week the NBR said the garment exporters who didn't have the licences would not qualify for the cash support.

Garment exporters sought help from Commerce Minister Tipu Munshi to this effect.

Yesterday, the leaders of the Bangladesh Garment Manufacturers and Exporters Association, the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), the Bangladesh Terry Towel & Linen Manufacturers and Exporters Association (BTTLMEA), and the officials of the NBR sat with the commerce minister to discuss the issue.

Munshi asked the senior NBR officials to explain the cash incentive issue to him today.

After yesterday's meeting, Mohammad Hatem, first vice-president of the BKMEA, said many factories started operations without the bonded licences. Later, they were awarded approval as they grew bigger.

The sudden decision of the NBR was contradictory to the business norms as the apparel exporters had been enjoying the benefit since the beginning of the garment industry in Bangladesh, he said.

M Shahadat Hossain, chairman of the BTTLMEA, said more than 105 small and medium-sized terry towel exporters did not have the bonded warehouse licences.

"But they have been doing business for many years. These factories will be in big trouble if the cash incentives are scrapped," he said.

Hossain also said the millers, garment exporters and cotton importers would sit for another meeting today to decide the yarn prices in the local market as per instruction of the commerce minister.

Munshi said the yarn price issue would be solved soon in consultation with the stakeholders.