Customs & Trade
Audit Provision for Cash Incentive Cases
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Executive Summary
The Audit Provision for Cash Incentive Cases, codified in Bangladesh Bank Circular FE-2 (2017) Section 9 and reinforced by EF-3 (2024), establishes the inspection and verification regime for cash incentive claims. Every exporter receiving cash incentives is subject to: (1) documentary audit by their Authorised Dealer bank (continuous, every quarterly claim), (2) on-site inspection by Bangladesh Bank foreign exchange inspectors (minimum once in 3 years), (3) risk-based post-clearance audit by NBR customs (for exporters with annual incentive claims above BDT 5 crore). Audit scope includes: verification of EXP forms against customs records, confirmation of repatriation of export proceeds within 120 days, validation of input-output norms for bonded warehouse users, and cross-checking of beneficiary ownership. Findings are categorised into: (a) no discrepancy, (b) procedural error (5% penalty), (c) under-claim (refunded with interest), (d) over-claim (clawback + 7.5% penalty), (e) fraudulent claim (criminal prosecution under FERA 1947).
Key Points
- Codified in BB FE-2 (2017) Section 9 + EF-3 (2024)
- 3-layer audit: bank (continuous), BB (every 3 years), NBR (BDT 5cr+ claims)
- Audit scope: EXP forms vs customs records
- Confirmation of 120-day export proceeds repatriation
- Input-output norms validation for bonded warehouse
- Beneficiary ownership cross-check
- No discrepancy: clean record
- Procedural error: 5% penalty
- Under-claim: refunded with interest
- Over-claim: clawback + 7.5% penalty
- Fraudulent claim: criminal prosecution under FERA 1947
Full Details
Guidelines for audit of cash incentive cases. Outlines the audit process, documentation review, and compliance requirements for exporters receiving cash incentives.