A Critical Analysis of the Bangladesh Customs Duty Drawback Regulations

Abstract

Abstract:

Purpose of the study: The objective of this paper is to explain the methods of customs drawback and identify the inadequacies and gaps in the regulatory regime of the duty drawback i.e. the Customs Act 1969 and the VAT Act 2012. Another objective of the study is to suggest measures to remedy the regulatory gaps and simplify drawback payment system.

Methodology: A qualitative research design was followed in conducting the study. In-depth interviews and a focus group discussion were used to get primary data while secondary data were generated from published materials and web-sources.

Findings: The paper identified the inadequacies and gaps in the Customs Act and VAT Act with regard to granting of duty drawbacks. In particular, there are lack of customs rules to operationlise the duty drawback enshrined in the customs act, lack of guidance on the durability of Input-Output Coefficient and a lack of recognition of duty drawback in the VAT and SD Act.

Implications: This study has the originality; it has identified the inadequacies and lacunas in the existing duty drawback regulations and suggested recommendations to overcome the limitations (inadequacies) of the existing regulatory regime for proper functioning of the Drawback.

Limitations and Future Direction: This study is largely based on literature review and a limited number of in-depth interviews and focus group discussion. The interviewees include public officials and few exporters only. Future studies on customs duty drawback may include more respondents from the private sector to have the full perspectives of the exporters/users of duty drawback facility. 

Keywords: Customs Duty Drawback, Flat Rate, Actual Rate, Bonded Warehouse, Supplementary Duty, Export, Coefficient.