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Customs act 2023 has empowered NBR

Published : Saturday, 30 March, 2024 at 12:00 AM  Count : 2310
MS Siddiqui
The Customs act 2023 is set to be operationalized with the next finance act  of financial year 2024-25. It has been claimed that the law has been enacted considering the Revised Kyoto Convention and the Trade Facilitation Agreement signed later for the purpose of simplifying various procedures of customs and to make the custom procedure compatible with international best practices and to make it business friendly. According to the objective of the bill, revenue collection at the import level of Bangladesh is being conducted under the Customs Act, 1969.Collection of revenue is not the only responsibility of National Board of Revenue (NBR).

The decision of tax official is a quasi-judicial. Fair decisions are precondition of transparency and trade facilitation. The impact of excessive tax onimported materials without justice may not encourage trade and investment. There should be transparency and predictability.

The law has been prepared in Bengali language for the purpose of making up-to-date provisions on revenue collection, expansion of import and export trade, facilitation of business and expansion of new industrial sectors. But an authentic English translation must be introducedto make it easier for the overseas investors and other users. The previous Customs act 1969 was framed in English.

The has duly incorporated various essential aspects of the Trade Facilitation Agreement (TFA) signed by the member countries including Bangladesh for the purpose of simplifying various procedures of customs initiated by the World Trade Organization (WTO) such as Advance Ruling, Stakeholders Consultation, National Inquiry Point (NEP), Website, Advance Passenger Information (API) / Passenger Name Record (PNR) etc. have been included. It further include Authorised Economic Operator (AEO), Mutual Recognition Agreement (MRA), Electronic Declaration, Risk Management, Post Clearance Audit (PCA) and Non-Intrusive Inspection (NII).

The law recognizes the various rights and responsibilities under different intellectual property laws such as Patent and copy right laws. Under section 17 of the law shall protect the GI goodsto protect rights of the patent and copyright holders. The new law has provisions (section 14, 15 and 16) for electronic record keeping and payment referring to  Communication Technology Act, 2006.

As a member of WTO and after graduation from LDC, we must open up the market for overseas exporters through trade facilitation and reduction of customs duty. One other hand, the local industries shall be protected with some counter tax against unfair competition from other countries. Such taxes are: countervailing tax (section 19), antidumping duty (section 20), safeguard tax (section 23).

The new Customs Act-2023 recognizes daily exchange rates of foreign currencies, or floating rates, ensuring transparency in customs assessments and transactions (section 27).This contrasts with a fixed exchange rate, in which the government entirely or predominantly determines the rate.A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies.Currently, customs are conducting assessment on an average rate of foreign exchange of the previous corresponding month which has been amended to daily exchange rates. The law has been passed while the central bank refuse to introduce floating exchange rate of foreign currencies.

The law has very strict rules to indict importer, exporter and clearing & forwarding agents under the Customs Law of 2023 similar to Penal Code, 1860 (Act No. XLV of 1860). The new law imposed a 10percent penal tax in case of delays in releasing goods from the ports that often create congestion in the ports, affecting businesses. An interest rate of 10 per cent on payable duties and taxes would be imposed on importers in case of delaying more than 10 days to release goods from the ports(section 32).

As per the new law, the customs authority would determine the rates of penalty on customs-related offences based on gravities and frequencies.The penalty for customs-related irregularities ranges up to 800 per cent on businesses that vary depending on the offences. It has also incorporated the provisions to check money-laundering, terrorist financing, import and export of dangerous arms.

Along with customs agents, exporters and importers are also going to be held responsible for the submission of documents and declarations related to cross-border trade.Regarding different customs incidents and it said that if anyone is punishable under any other law, without undermining it, he or she shall be punished in addition to this law. Under section 171, some of the offences has been recognized as criminal offences and punishment given under this law. The offences are smuggling, non-compliance of rule of customs warehouse, entering computer system to collect data and other information, wrong statement/ declaration to the custom authority.The law also makes offices of non-cooperation or creation of obstacle to perform responsibilities of the custom authority.

Under section 101, the law has provision of temporary admission of goods for re-export and transshipment (Section 135).Temporary Admission (ATA) Carnet. The law has a foot note that "Temporary Admission (ATA) Carnet" as per Istanbul Convention on Temporary Importation/Temporary Admission (ATA) Carnet. The business community was demanding the ATA Carnet facilitate temporary without paying tax under guarantee for take back these goods after exhibition or any other purposes. The introduction of ATA carnet re-export and others may be regulated by some rules.

There is long standing demand that the regulator and policy maker should not be single department. But unfortunately, the rule making, and implementation of the rule vested to NBR.

Moreover, the law has curtailed the authority of the government and empowered National Board of Revenue (NBR). Under section 25, The government has abolished its special power of granting duty exemptions without consultation with the National Board of Revenue (NBR). A NBR official claimed that the governments general power - granting duty exemptions after consultations with the NBR - will remain consistent with the existing Customs Act, 1969.

Due to the change in law the authority of the Ministries will be subject to approval of NBR and due to such changes, getting duty exemptions for essential imports may become more time consuming. At present, government may exempt duty on import of essential goods as an when necessary. A smooth import of essentials is key to bringing their prices down in the local market, and ensuring a steady supply.

There is no clause related toappeal and tribunal against the decision of custom assessment officials. There is a common tendency of the government to establish an appeal and tribunal board under the control of the NBR. Similarly, under income tax law, the appeal and tribunal are place under control of NBR and almost made such judicial bodies to a department of NBR.  Bangladesh needs independent appeal and tribunalauthorities for a fair decisionwithout interference of NBR.

The law may be reviewed as too much authority to NBR may be counter to productive and may not facilitate economic activity. There should be some shared responsibility of framing the rules and implementation of the rules and regulations.

The writer is a Non-Government Adviser, Bangladesh Competition Commission



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