Bangladesh has permanently opened its two major seaports — Chattogram and Mongla — for India to use for transit and transshipment of goods in exchange for set charges.
Officials said the customs authority under the National Board of Revenue (NBR) issued a permanent order to this effect on Monday, defining all the procedures and fees to be applicable for transportation of goods to and from the landlocked northeastern states of the neighbouring country.
For the first time, customs has imposed transit and transshipment fees with 15-percent VAT on each of the services as per the VAT and Supplementary Duty (SD) Act 2012.
However, all existing rates of fees set in 2020 in the Transit and Transshipment Order of Customs remained almost unchanged.
Earlier, under a river protocol, Bangladesh allowed India to use its Ashuganj customs point as a transit route.
After successful completion of four trial runs of transit and transshipment, the customs authority issued the permanent order with provisions for checking irregularities, the officials said.
The NBR issued the order in accordance with a bilateral deal titled ‘Agreement for the use of the Chattogram and Mongla ports (ACMP)’ signed in 2018.
Despite the trial runs of goods transportation having been completed in October last year, the next-door neighbour could not use the transit facilities on a regular basis in absence of a permanent order, defining Standard Operating Procedure (SOP).
India signed the agreement to reduce both cost and time for transportation of goods to its northeastern states.
An SOP was signed in to operationalise the cargo transit in 2019 during a visit of Bangladesh Prime Minister Sheikh Hasina to India.
“Regular movement of transit and transshipment goods of India can be facilitated from now on following issuance of the order,” says one customs official.
As per the order, inked by Customs Member Dr Abdul Mannan Shikder, VAT has to be paid through electronic transfer or direct account- payment method.
Document-processing fee has been fixed at Tk 30 per chalan while transshipment fee Tk 20 per tonne, security charge Tk 100 per tonne, escort charge (if applicable) Tk 85 per kilometre for transportation of container by truck, trailer or covered van. The escort fee for trial runs of transit goods was Tk 50 per tonne.
Miscellaneous administrative charges have been set at Tk 100 per tonne, container-scanning fee Tk 254 per container, electronic lock and seal (if applicable) as per the rules.
Tolls for using roads would be collected as per the rates to be fixed by the Road Transport and Bridge Authority.
The routes for transit and transshipment include Chattogram-Mongla port to Agartala via Akhaura, Chattogram-Mongla port to Dawki via Tamabil, Chattogram-Mongla port to Sutarkandi via Sheola, Chattogram-Mongla port to Srimantapur via Bibirbazar and vice versa.As per the SOP, the clearing and forwarding agents will have to be enlisted as transit operators to handle transit and transshipment goods.
They must submit the last five years’ working details, tax-compliant status, non-refundable treasury chalan and application fee worth Tk 10,000, unconditional and continuous bank guarantee worth Tk 1.0 million, risk bond worth Tk 5.0 million to the customs authority.
“The operators would be held responsible if transit and transshipment goods without valid reasons stay more than seven days within Bangladesh territories after customs clearance,” says one provision.
Transit and transshipment goods-carrying ships have to submit ‘cargo manifest’ within 24 hours of entering the Bangladesh Port of Entry.
The transit operator will have to submit a bill of lading or truck receipt, commercial invoice, packing list and customs bond on non-judicial stamps of Tk 300.
Through the order, the customs made use of the electronic seal and lock mandatory for the container transit and transshipment of goods from India.
However, the customs can also arrange escort if it found the goods vulnerable under risk-management methods.
Transit goods have to leave Bangladesh through the Port of Exit within seven days after completion of all procedures at the Port of Entry.
However, the customs authority would be able to extend the time in case of any emergency. The transit operators have to release the customs bond showing necessary documents on successful completion of transit and transshipments.
A senior customs official said the agreement would help both the countries as Bangladeshi C&F agents and the transport sector would earn money from the transit-goods movement.
Under the agreement, the traders would have to use only Bangladeshi trucks and transit operators for the transshipment of goods.
Dr Abdul Mannan Shikder said, “The order has been drafted in line with the SOP and based on a series of consultations with the stakeholders concerned.”
The customs allowed the C&F agents to work as transit operators as the shipping agents are not available at the land ports, he said. “There is also a scope to amend the order in case any complexities arise in its implementation,” he added.
President of the India-Bangladesh Chamber of Commerce and Industry Matlub Ahmad said imposition of VAT on transit goods would ensure equal tax treatment for local and Indian businesses since they are paying the fees in the local currency, Taka.
Distinguished fellow of the Centre for Policy Dialogue Professor Mustafizur Rahman said the opening up of sea ports created a new opportunity for both the countries in the areas of trade and commerce.
"The proposed Comprehensive Economic Partnership Agreement between the two countries would also get a new pace," he said.
The transportation sector of Bangladesh would reap a positive outcome of the SOP, he said.
The local vessels in the sea of Bangladesh can also explore the area as there is no bar for using Indian ships for transit goods, he added.
He suggested that the government urge the Indian counterpart to offer a similar facility to enter a third country using its port.
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