Bond Management Questions and Answers (Part 1)
1) Q: What is a bonded warehouse? How many types? Which section of the Customs Act deals with the types of warehouses?
Answer: A bonded warehouse is a protected place or warehouse licensed under Sections 12 and 13 of the Customs Act, 1989, where the goods are later reserved for export and domestic consumption without payment of duty.
Bonded warehouses are first of two types;
(A) Public Bonded Warehouse
(2) Private bonded warehouse
Section 12 of the Customs Act, 1989 provides for the issuance of public or government bonded warehouse licenses. Similarly, Section 13 mentions the issuance of private bonded warehouse licenses.
(2) Question: What is meant by bonding term? Under which section of law is the bonding period given for which industry?
Answer: According to Section 96 of the Customs Act, 1989, the bonding period of a product is the period for which the bonded goods are kept in the bond.
According to section 96
(1) Bonding period for export oriented shipbuilding industry is 48 months.
(2) The bonding period of other export oriented industries is 24 months.
(3) The bonding period of the goods kept in the diplomatic warehouse is 12 months.
(4) In other cases, the bonding period of the product is 6 months. (This is basically home consumption bond).
(3) Question: Which organizations can be licensed as per Bonded Warehouse Licensing Rules 2006?
Ans: You will get bond license as per Bonded Warehouse Licensing Rules 2006;
(1) Direct export oriented industrial establishments;
(2) latent export-oriented industrial establishments;
(3) diplomatic, duty free, duty paid institutions;
(4) Government and private EPZ area industrial establishments;
(5) industrial establishments in the Bangladesh Economic Zone;
(6) industrial establishments in the high-tech park area;
(4) Question: What is General Bond? In case of any type of organization, how long is the General Bond term?
Ans: General Bond is a bond with a non-judicial stamp of Rs. It bears the signatures of both Bonder and Lien Bank.
(1) A direct export oriented industrial company has to submit a general bond of Rs. 3 (three) crore for three years.
(2) Export-oriented disguised industrial establishments have to submit a general bond of Rs. 1 (one) crore for one year.
(3) The latent and direct simultaneous export oriented industrial establishment has to submit a general bond of Tk. 2 (two) crore for two years.
(4) Diplomatic, duty free, duty paid institutions have to submit a general bond of Rs. 3 (three) crore for three years.
(5) Question: HS Code? What is the method of adding HS Code?
Answer: The HS Code is the internationally recognized unique code for product specification, through which people in all countries of the world can understand what the declared product is. It is updated every year from the World Customs Organization Brussels.
If a bond institution wants to add a new raw material (HS Code) to its license, it has to apply on the pad of its institution along with the concerned departmental officer of the Bond Commissionerate. At the same time the application has to explain why the raw material is needed. At the same time, it is better to have the recommendation of the concerned association.
After the submission of the application, the use of raw material is verified by the concerned Bond Officer and Revenue Officer and the H.S. Code is recommended and then the recommendation is approved by the Commissioner and the raw material and its H, S, code are included in the bond license.
(6) Question: What is the annual import availability? In what manner is the annual import availability paid?
Answer: As per the Order No. 14/2008, the share of raw material import given to the bonded licensed latent export oriented industrial enterprise for the production of goods according to the capacity of its machine is the annual import availability.
In case of giving it, the production has to be observed by running the machine in the normal way by appearing on the spot in the organization. Then it is to be applied in the following way;
Annual production capacity = 300 days per year X 20 hours per day X production per hour.
In the first year of issuance of new licenses, 30% of the total production is imported.
In the case of old licenses, annual import availability is given by adding 20% to the total exports of the company in the previous year.
(6) Question: What are the documents to be submitted for annual audit?
Answer: The documents submitted for the annual audit are as follows:
(1) Import and export details in the prescribed chart certified by Lien Bank.
(2) PRC for the period of audit in the table prescribed by Bangladesh Bank which is certified by Lien Bank.
(3) Pass book information.
(4) LC, B / E, Invoice, BL for the audit period.
(5) Original copy of LC, Bill of Export, Invoice, BL, EGM, Export Order, UD Orders for audit period.
(6) UD statement by BGMEA / BKMEA.
(6) Bond transfer details (if any)
(6) Question: What is a bond registrar? How many? Does it contain information?
Answer: According to section 114 of the Customs Act 1989, the bond registrar is the registrar containing the details of the products in each bond institution.
The Registrar 2 has an original copy which will be kept in the Bond Commissionerate. The 2nd copy will be with Bonder.
Commercial description, quantity, value, etc. of imported goods should be mentioned on the left side of each register first. Then all the details of export have to be on the right side during the export of goods produced with UP.
(9) Question: What is Lien Bank? What is the method of addition and subtraction of Lien Bank? How many lien banks can an organization list?
Ans: Lien is the bank through which the bond institution conducts its business.
In case of addition of Lien Bank, application has to be made in the bank's own pad along with Bangladesh Bank's CIB credit information bereau report and previous Lien Bank's no-objection letter.
In case of change of Lien Bank, application has to be made on the institution's own pad along with the existing Lien Bank no-objection letter.
In case of change of branch of Lien Bank, you have to apply on your own pad mentioning the name of the branch.
A bond institution can list a maximum of three lien banks. If more Lien Bank is needed, Bonder will apply to the National Board of Revenue.
(10) Question: What are the steps to collect government arrears?
Answer: The steps under section 202 of the Customs Act 1989 for collection of government dues from any person or organization are as follows: -
(1) the debtor must issue a claim;
(2) If there is any money of such institution as a bank, it must be deducted from it by letter to that bank. The bank account of the organization has to be frozen.
(3) If any other product of the said company is in any customs station, it must be seized and arrangements have to be made to collect the government dues.
(4) The BIN of the company should be LOCKed so that the company cannot export any import.
(5) If there is any affiliated organization of the said organization, it should be locked and the program should be stopped or the goods kept there should be confiscated and sold and the government dues should be collected.
(6) Even if the government dues cannot be recovered by following all the above procedures. Auctioning the immovable property of the place where the person resides and filing a certificate case for recovery of dues.
Some important questions about bonds and their solutions are briefly given: (Part 2)
1) Question: Judicial power is determined at what price? Mention the steps of judicial power by referring to the section of the Customs Act.
Answer: If a product is seized, temporarily detained or confiscated for violating the Customs Act 1979, it is judged according to the law. Judicial power is determined on the actual value of the goods seized, temporarily detained and confiscated.
Section 179 The steps of judicial power are:
First we have to see who will do the judicial work. How much money was given to the judicial power below.
(A) Commissioner more than 20+ lakhs
(B) Extra Commissioner 15-20 lakhs
(C) Joint Commissioner 10-15 lakhs
(D) Deputy Commissioner 5-10 lakhs
(E) Assistant Commissioner 5 lakh
(F) Revenue efficiency 2 lakh
Secondly, for the purpose of seizure, temporary seizure, or confiscation of goods, according to Section 18 of the Customs Act, 1989, a show cause notice has to be issued within 2 (two) months. Anyone who shows cause should be given a chance to appear at the hearing. If the person is unable to attend the hearing, he or she must be given the opportunity to attend the hearing. He should be given an opportunity to give a written reply.
Thirdly, after appearing at the hearing, the statement of the person hearing, the written reply has to be reviewed in accordance with the law. Then you have to order. However, if the person confesses to the offense at the time of issuing the notice, the matter may be disposed of by a summary judgment, then the matter may be disposed of by a summary judgment.
(2) Question: What documents have to be submitted with UP?
Answer: All the documents that have to be submitted with UP are as follows:
(A) Proforma Invoice or P, I
(B) BBLC (Back to Back LC)
(C) Copy of UD
(D) Coefficient
(E) EXP (where applicable)
(F) TT / ATT (where applicable)
(G) Master LC (where applicable)
(3) Question: What are the products prohibited to import according to the import policy order?
Answer: According to the Import Policy Order 2015-16, the import prohibited product is:
(1) Controlled products: Shrimp, Poppy Seed, Cannabis, Opium, Wine Lease, Petroleum Residue, Solid Sugar, Artificial Mustard Oil, Current Mesh, PP Bag, 2 Stroke Engine Vehicle, etc.
(2) Prohibited products: Maps, pornographic books, films, CDs, posters, jabbot and stocklet products, old office equipment, live pigs and their products, all waste, industrial sludge, counterfeit coins, etc., which do not show the location of Bangladesh.
(4) Question: What is BCT? What is LC, LCA, B / E, BIN, TIN, GSP, IGM, EGM?
Answer: BCT Bangladesh Customs Tariff (Schedule) This is done under Section 18 of the Customs Act, 1989. This schedule contains the trade description, tariff rate and unit of trade of all goods imported and exported in this country.
LC = Letter of Credit
LCA = Letter of Credit Authorization (Form)
B / E = Bill of Entry
BIN = Business Identification No
TIN = Tax Identification Number
GSP = Generalized system of Preferences
IGM = Import General Manifest
EGM = Export General Manifest
(5) Question: What documents need to be verified for relocating the factory?
Answer: All the documents that have to be submitted for factory transfer are as follows:
(A) Ownership or lease agreement
(B) Lay out plan
(C) Trade license
(D) Recommendations of the Association
(E) No-objection letter of Lien Bank
(F) Commitment during transfer
(G) Revised I, R, C / ERC
(H) Revised TIN, Investment Board Letter
(I) Fire, electricity bill at new address
Verification is required if the above mentioned documents are submitted.
(6) Question: How many EPZs are in operation under Customs Bond Commissionerate, Dhaka?
Answer: There are 2 EPZs under Customs Bond Commissionerate Dhaka viz
(A) Savar (East and West) EPZ
(B) Adamji EPZ
(6) Question: What is Home Consumption Bond?
Ans: Home Compensation Bonds are those companies which issue bonds for domestic consumption without paying duty at the time of import of goods.
(6) Question: In which form approval is required by the joint stock in case of change of ownership?
Answer: Form XXII
(9) Question: Which authority can be appealed against the order of the Commissioner? According to which section?
Answer: An appeal can be made to the appellate tribunal against the order of the commissioner.
Pursuant to Section 198 of the Customs Act, 1989.
(10) Question: What is the full form of ASYCUDA?
Answer: Automated System For Customs Data
(11) Question: According to section 35 of the Customs Act 1989, within how many days the imported goods have to be exported?
Answer: It has to be exported within 2 (two) years.
(12) Question: If the goods are imported with declaration of untruth, under which section of the Customs Act can punishment be given?
Answer: Punishment can be given according to section 156 (1), (14).
(13) Question: What level of efficiency is required to check the production capacity of the machine?
Ans: In case of old institution, presence of Assistant Revenue Officer and Revenue Officer and at the time of issuance of new license, A, R, O + R, O + AC / DC is required.
(14) Question: Within how many days is the provision for disposal of new bond license application?
Answer: Within 30 days.
(15) What is direct / latent export oriented industrial organization?
Ans: All the companies which import raw material or produce the products produced by the raw material collected through back to back LC directly outside the country.
Here are some questions about Bond Management and brief answers: (10 in Part 3)
1) Q: What is a bonded warehouse license?
Answer: According to the Bonded Warehouse Licensing Rules 2006 and Section 12/13 of the Customs Act 1989, when a license is issued to an organization in the specified form, it is a bond license. According to section 12, government licenses are issued to private companies under section 13.
(2) Question: What are the documents to be submitted with the application for Bonded Warehouse License?
Answer: All the documents that have to be submitted along with the bond license application are as follows:
(A) Fill in the data form attached to the license
(B) Board of Investment, BSIC, Textile Certificate
(C) Certificate of Trade, IRC, ERC, VAT, TIN, NID
(D) Memorandum of Articles
(E) Tax Return + IT10B
(F) Environment, Boiler Certificate (where applicable), Fire Certificate,
(G) Electricity, gas bills
(H) Letter to the Commissioner recommending the Association
(I) House rent agreement / own land deed
(J) Lien Bank has certification of J. Bond capability
(K) Name, address, photo, phone information of the applicant on non-judicial stamp of Rs.500
(L) Promise to abide by the business norms of the country with non-judicial stamp of Rs.500.
(M) Lay out plan in ammonia print
(6) Factory certificate
(3) Question: How long is the license? What are the reasons for revoking the license?
Answer: License period is 2 years.
If you are always involved in breach of license conditions and revenue fraud, then the license can be suspended / revoked in the context of bond application.
(4) Question: Who is the Bonded Warehouse Licensing Authority?
Ans: All the districts / thanas / areas under the jurisdiction of Dhaka and Chittagong bonds have their own bond commissioners, VAT commissioners for all other areas.
(5) Q: What is a continuous bond license? What are the conditions of this bond license?
Answer: As per the General Order No. 12/2006 / Customs / 439 (1-15) of 10/7/2008 of the Board, the same proprietorship is ordered to carry out its activities from other places under the original license to carry out similar work within the specified area. Continuous bond license.
Conditions of Continuous Bond License:
(A) of the same owned bonded institution
In case this benefit will be obtained.
(B) Two places will get this facility under one license.
(C) Knit, oven, dyeing and printing, towel, linen and home textile sectors will benefit.
(D) Continuous facilities may be provided in those areas where BGMEA, BKMEA, BTMA activities are within a 60 km radius of the parent institution of the Bond Commissionerate.
(E) Even if the Continuous Bond is under the original license, he has to keep the same type of accounting here as he keeps all the ledger documents in the original institution.
(6) Question: What is inter-bond transfer? What are the documents to be submitted for permanent and inter-bond transfer?
Answer: According to Section 99 of the Customs Act, 1989, if any two entities transfer goods bonded in one bond to another bonder as per the demand of the buyer, it is inter-bond transfer.
Documents to be submitted for inter-bond transfer:
(A) Agreement executed between both the institutions on non-judicial stamp of Rs.500.
(B) Submitting all commercial documents relating to the import of goods / raw materials.
(C) No Objection Letter of Lien Bank.
(D) Copy of LC / Sales Contract, Back to Back LC, P, I, UD, Purchase Order of the organization receiving the raw material.
(E) Samples of transferable raw materials.
(F) Recommendation of the concerned association.
(G) Rex bond to be borne by the inter-bond institution in case of loss during transfer of goods.
Subject to the submission of such documents, verification and selection can be ordered for inter-bond transfer. It is mentioned here that this bond transfer information has to be updated by making an entry in the pass book of both the institutions.
(6) Question: Is it necessary to pass book?
Answer: The pass book is the book in which 100% export oriented industrial organization imports and exports goods by entering the information of its import and export. Each institution will have two side books. One customs copy will be in the customs office and the other duplicate pass book will be in the bond organization.
In addition, pass books are issued from the Bond Commissionerate to diplomats and associates for the purchase of goods for diplomatic and duty paid bonds. This is also a kind of side book.
The importance of the pass book is immense for viewing and keeping accounts at a glance as the import-export of a bonder and the purchase of goods of a privileged person.
(6) Question: What is commissionerate?
A: The Commissionerate is the organization that sells beverages, liqueurs, food and other items to foreign investors working and staying inside EPZs. It will be located inside the EPZ.
(9) Question: What is the procedure for issuing license to the organization located in EPZ?
Ans: Institutions located in EPZ are first given temporary bond registration on the basis of their application. All it takes to register a temporary bond is:
(11) Prayer on letter head pad with list of products.
(2) BEPZA Request letter.
(3) Factory set up permission.
(4) Lease agreement.
(5) Factory lay out plan / Blue print.
(6) Memorandum of Article of Association.
(7) VAT Registration.
(8) Trade license. IRC. ERC.
(9) General bond signed by bonder as per RJSC.
(10) Bank certificate.
(11) Power in favor of Authorized pe
Here are some questions and solutions related to bond management: (10 in 4th episode)
(1) Question: Who is the bond licensing authority?
Answer: In case of jurisdiction of Dhaka, Chittagong Bond Commissionerate, Bond Commissioner is concerned with VAT Commissioner in other areas.
(2) Question: Which authority issues private bond license? How many days or months do you have to take notice to cancel the license?
Answer: Under Section 13 of the Customs Act, 1989, the Bond Commissioner issues private bond licenses. The license has to be canceled with 30 days notice. The notice issued must give Bonder a chance to be heard. However, before cancellation, the import and export of the company has to be checked or audited to see if the company has any government dues.
(3) Q: What is cutting supervision?
Answer: If there is any doubt as to whether the raw material of 100% export oriented company will be exported especially during the import of cloth, a request is made through letter from the Commodity Import Station to supervise the production of cloth and garment in the presence of Bond Officer. Supervision from the Bond Commissionerate is the supervision of cutting.
(4) Question: What is Rix Bond?
Answer: If the goods, raw materials or machinery of the bond organization are damaged, the bond will be liable if the goods, raw materials and machinery are damaged and the non-judicial stamp of Rs.
(5) Question: Which section of the Customs Act 1989 seeks the assistance of another department?
Answer: According to Section 8 of the Customs Act 1989, the assistance of another department is sought.
(6) Question: Is there an opportunity to issue a bond license if there is a claim against the associate?
Answer: If any organization applies for bond license as per letter no. If there is a writ petition, the applicant has no chance to issue a bond license until the claim is paid.
(6) Question: How long does it take for the entire export oriented (latent) industrial organization to inbound the goods?
Answer: Within 5 (five) days.
(6) Question: What documents need to be submitted for change of ownership?
Ans: All the documents that need to be submitted to change the ownership are: -
(A) change of ownership: decision of the Board meeting;
(B) the modified ownership structure approved by the Board of Investment;
(C) RJSC Approved Form XXII & 117
(D) the non-judicial stamp of Rs.
(E) a copy of the new owner's nationality certificate or passport;
(F) Lien Bank no-objection letter and new owner's bond power letter;
(G) General Bond with non-judicial stamp of Rs. 2000 of the new owner;
With all these documents, Koi will apply on his own pad. After verifying and selecting the application, the concerned divisional officer will approve it.
(9) Q: How will the bonded fabric be arranged?
Answer: According to section 96, bonding expired cloth has to be collected and duty has to be collected. However, if the quality of the cloth is right, you can apply to the Bonder Commissioner and extend the time by 3 months and 3 months by applying to the Bonding Commissioner. If Bonder gets any new export order within that period, he will also get the opportunity to export.
(10) Question: How many days to appeal against the order of justice;
Answer: You have to appeal within 90 days.
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