The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) recently made it mandatory for factories to provide the unit price of imported raw materials and readymade garments produced for export to get utilisation declaration (UD) certificates.

A UD certificate is a key customs document authorising the use of duty-free imported raw materials for manufacturing export-oriented garments. It is required for customs clearance, export processes and trade preferences and cash incentives.

The Bangladesh Garment Manufacturers and Exporters Association recently made it mandatory for factories to provide the unit price of imported raw materials and readymade garments produced for export to get utilisation declaration (UD) certificates.
The move, to be implemented from September 1, is aimed at ensuring transparency and accurate valuation in the industry.

The move is aimed at ensuring transparency and accurate valuation in the industry.

A BGMEA circular instructed member factories to include the information to receive the UD certificates from the trade body from September 1.

“To sustain the competitiveness of the locally produced exportable garment items in the international market and to maintain the trust of foreign buyers, it is essential to accurately declare the unit price of imported raw materials and the corresponding exportable garments produced in BGMEA member factories,” read the circular.

The notice said both global buyers and domestic regulators, including the National Board of Revenue, have raised questions about transparency and accurate value addition by the industry in the absence of unit price, according to domestic media outlets.

Both BGMEA and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) issue UD certificates to their members against each work order, detailing exporter, importer and raw material information.

Around 1800 member factories receive UD certificates from BGMEA every month.

Local garment items’ value addition remained almost static between 60 per cent and 64 per cent from fiscals 2012-13 to 2018-19, according to Bangladesh Bank data.

Fibre2Fashion News Desk (DS)