Limestone flux import hits snag for HS code mismatch

Importers could not import limestone flux (solid form) from Bhutan since February for higher duty charged on the industrial raw material for mismatched HS code of the item, industry-insiders said.
Limestone import was enjoying duty-free facility under HS code 2521.00.00. But the customs authority last February declared the duty-free facility for feed-grade limestone under HS code 2517.49.00.
Change in the HS code of the product threw the importers into a quandary as they were subjected to paying 25 per cent duty on import of the previous category of limestone.
Customs officials said the zero-rated duty has been provided for the feed- grade limestone for the poultry industry. However, the importers of limestone flux argued that feed-grade limestone cannot be defined as limestone.
The HS code 25.21 is for import of limestone flux (a category of limestone and other calcareous stone used for the manufactures of lime or cement).
Limestone flux is used in the iron and steel industry for increasing fluidity and eradicating impurities.
The industry sources said due to the suspension of import of the raw material under the given circumstances, the industries concerned are in problem. The industries are procuring the limestone flux at higher prices from other sources.
They said according to the customs act 1969 (first schedule) the HS code of limestone is 25.21. The customs authority has offered the duty-free facility for the limestone under feed grade. However, there is no clear definition of feed-grade limestone in the customs act, they added.
Bangladesh Acid Merchants Association (BAMA) recently demanded of the government to allow duty-free import of limestone from Bhutan under HS code 2521.00.00 as per bilateral trade agreement signed between the two neighbouring South Asian countries.
A circular issued on February 27, 2013 announced zero-duty facility for imported limestone with the HS code from Bhutan to Bangladesh under the bilateral trade agreement.
The association leaders urged the government to resolve the HS-code complexities regarding assessment of the imported limestone through Burimari customs station.
The BAMA has sent a letter with a detailed analysis of the justification of assessment of the product under the previous HS code to allow its zero-rated import.
Al-hajj Harun-or Rashid, president of the BAMA, in the letter said as per trade agreement with Bhutan the businesses had imported limestone from the Himalayan country under duty-free facility until February 6, 2016.
"In an order, customs has instructed conducting valuation of the product in a separate HS code instead of earlier one. Importers are unable to release the product under the new HS code," his letter reads.
Importers have to pay 25 per cent import duty under the new HS code, he said about the cause of deadlock in the import trade.
    [email protected]