Limestone and calcium carbonate exports to Bangladesh halted since February
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.