Lime­stone and cal­cium car­bon­ate ex­ports to Bangladesh halted since Fe­bru­ary

Business Bhutan - - Trade - Dechen Dolkar

Bhutanese ex­port houses that ex­port lime­stone pow­der and cal­cium car­bon­ate to Bangladesh have suf­fered set­backs since Fe­bru­ary this year ow­ing to what they call ‘vi­o­la­tion of the bi­lat­eral trade agree­ment be­tween the two gov­ern­ments’.

The ex­port of lime­stone pow­der and cal­cium car­bon­ate to Bangladesh were halted due to change in Har­mo­nize Sys­tem (HS) code.

In Fe­bru­ary this year, the Bangladesh cus­tom asked Bhutanese ex­porters to clas­sify lime­stone un­der dif­fer­ent HS code, which is tax­able. Sim­i­larly, in early May this year, they were asked to clas­sify cal­cium car­bon­ate un­der dif­fer­ent HS code which is again tax­able. With the new HS code, the to­tal tax im­pli­ca­tion in terms of cus­tom and other du­ties in­creases by a whop­ping 59.89%.

HS code is an in­ter­na­tion­ally stan­dard­ized sys­tem of names and num­bers to clas­sify traded prod­ucts. It is de­vel­oped and main­tained by World Cus­toms Or­ga­ni­za­tion. The lime­stone used for pro­cessed poul­try and fish feed un­der HS code 2121.00.00 and cal­cium car­bon­ate used as raw ma­te­ri­als for pa­per, plas­tic, and rub­ber un­der HS code 2836.50.00 are ex­ported to Bangladesh.

Bhutan and Bangladesh have pref­er­en­tial trade agree­ment and 18 items are ex­empted from any du­ties when ex­ported from Bhutan to Bangladesh.

RSA Pri­vate Lim­ited is one of the com­pa­nies that ex­port lime stone pow­der and cal­cium car­bon­ate to Bangladesh. The Joint Manag­ing Di­rec­tor of the com­pany, Singye Nam­gyal, said both these prod­ucts were ex­ported to Bangladesh with­out any cus­tom du­ties. “Both these prod­ucts are on the list of 18 items ex­empted from any du­ties when ex­ported from Bhutan to Bangladesh as agreed in the bi­lat­eral trade agree­ment signed be­tween the two coun­tries,” he said.

Fol­low­ing the al­ter­ation in the HS code, Bhutanese ex­porters have not ex­ported these prod­ucts to Bangladesh since Fe­bru­ary this year. “Such a move by Bangladesh cus­toms to change the HS code uni­lat­er­ally vi­o­lates the bi­lat­eral trade agree­ment signed be­tween the two gov­ern­ments,” said Singye Nam­gyal. “This move has re­sulted in a com­plete halt on the ex­ports of both these prod­ucts from Bhutan re­sult­ing in the shut­down of op­er­a­tions at the man­u­fac­tur­ing plants in Bhutan.”

The Gen­eral Sec­re­tary of Bhutan Ex­porters As­so­ci­a­tion, Tsh­er­ing Yeshey, said that the As­so­ci­a­tion has taken up this is­sue with the gov­ern­ment. “Cur­rently, the De­part­ment of Trade and Bhutanese Em­bassy in in Bangladesh are try­ing to re­solve the is­sue,” he said.

Mean­while, the Trade Di­rec­tor, Sonam Ten­zin, con­firmed with Busi­ness Bhutan that HS code is­sue with re­gards to cal­cium car­bon­ate has been re­solved. “They (ex­porters) can ex­port the prod­uct with­out any du­ties,” he said.

The is­sue with lime­stone pow­der will be dis­cussed dur­ing the Bhutan-Bangladesh Com­merce Sec­re­tary level meet­ing to be held in Thim­phu in Jan­uary next year. The Joint MD of RSA Pri­vate Lim­ited, Singye Nam­gyal, said the HS code of these prod­ucts should be re­tained as pre­vi­ously agreed so that it does not have a tax im­pli­ca­tion while be­ing ex­ported from Bhutan to Bangladesh.

Last year RSA Pri­vate Lim­ited ex­ported around 75 tons of lime­stone pow­der and cal­cium car­bon­ate to Bangladesh. This year, the com­pany ex­ported just about 15 tons of these prod­ucts to Bangladesh.

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