Budget 2014 –Customs Duties and Supplementary Duties(SD) – (January 2015_Issue 1)

January 9, 2015, by Junayed Chowdhury

The Value Added Tax and Supplementary Duty Act, 2012 is scheduled to be implemented from 1st July, 2015. The existing SD rates are being reduced in phases. Accordingly the present 10 SD slabs have been changed to 12 slabs. The existing SDs are reduced to the nearest next lower slabs. For example, previously 10% SD rates were applicable for 7 items but now 10% SD rates is applicable for 51 products.


New import tariff which includes withdrawal or imposition of regulatory duties, tax exemption, reduction, augmentation, or rationalization of import tariffs, is given below.


  • SD rates on 40 basic raw materials’ necessary in the pharmaceutical sector have been fixed at 5% concessionary rate. However, other existing concessionary rates will be enjoyed by the sector as before.


  • The customs duties on 14 items used as raw materials in the manufacture of anti-cancer drugs and medicines and the import duties on infusion pump used for the treatment of Thalassemia have been fully exempted.


  • The duties applicable for 41 items used as essential raw materials in the manufacture of Ayurveda medicines have been fixed at 5 %.


  • The duties and taxes on some new raw materials in poultry sector have been fully exempted.


  • The previous customs duties of 10% and 25% on the raw materials used in domestic paper, glass and ceramics, rubber, furniture, paint, electrical, plastic industries that are gradually evolving under duty and tax exemption, concession and protection, have been re-fixed at 5% and 10 % respectively.


  • The duties on machines and equipment used in rail sector have been reduced to 5%.


  • 5% regulatory duty on 15” to 16’’ rim sized tire has been imposed and duty on bicycle tube has increased to 25%.


  • The tariff value on crude petroleum oil is increased to USD 40 cent per liter. Similarly, the tariff values have been increased to 40 cent per liter on other refined petroleum products.


  • The concessionary facilities enjoyed by the manufacture of ships have been extended. The previous duties on navigation light, broadcasting equipment and fire extinguishers are fixed at 5%.


  • Duty on dump truck, used in the construction sector have been allowed the concessionary benefit enjoyed by the capital goods.


  • The export-oriented readymade garments sector (RMG) is allowed to import the raw materials necessary for the manufacture of prefabricated buildings without duties on certain conditions. In addition to that, the duties on fire resistant door, emergency light, sprinkler system, etc. have been fully exempted.
  • The 10% duty chargeable to a few raw materials used in the textile sector has been reduced to 5%. SD on flex fiber and artificial staple fiber have been reduced to 5% and 3% respectively.


  • 100% SD is applicable to the 1,501 to 2,000 C.C. motor cars.


  • For the 2,001 to 2,750 C.C. motor vehicles, 200% SD has been fixed.


  • Further, 60% SD on new hybrid cars from 1,500 to 2,500 C.C has been imposed. SD for the CKD motor vehicle having cylinder capacity above 2,000 C.C. has been fixed to 60%.


  • 45% SD has been fixed on microbuses of 1501 C.C. to 1,800 C.C. engine capacities.


  • 60% SD has been fixed on 1,801 to 2,000 C.C. microbuses.


  • 30% SD has been imposed on motor vehicles falling with seating capacity not exceeding 15 persons.


  • Moreover, the SD on double cabin pickup up to 1,500 C.C. and from 1501 to 2750 C.C. has been fixed to 45% and 60% respectively.


  • A passenger is allowed to bring 100 grams of gold ornaments free of taxes under the Passenger Baggage Rules and additional 200 grams on payment of Tk. 3,000/- specific duty for each tola of gold bar/bullion.


  • In relation to the iron and steel industry two changes are implemented, which are (i) enhancement of specific duties that remained unchanged for many years and (ii) exemption on billet manufacturing raw materials such as sponge iron and reduced iron.


  • The custom duty on multiplexer, grand master clock etc. which are used in high speed internet connection, has been fixed at 5%.


  • The import duties on LPG cylinders and customs duty on energy saving bulbs and electric fan motors have been fixed at 25 %.


  • The duty on raw materials of diaper has been fixed at 10%.


Finally, in order to prevent mis-declaration, under and over invoicing and money laundering, modern customs management techniques and tools such as Risk Management, Customs to Customs Co-operation, Customs Valuation Management, and Goods Examination Management, Customs Business Partnership, Customs Bond management and Coordinated Border Management have been introduced from the very beginning of 2014-2015.    


Written by Junayed Chowdhury, Managing Partner  


Disclaimer: The opinions and comments expressed in this Blawg are not to be regarded or construed as legal advice by and from Vertex Chambers or any of its members. It is highly advisable that any person should seek independent legal advice before relying on any of the contents of this Blawg.