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Bangladesh Tariff Schedule 2020: Duty Rates by HS Code and Import Cost Analysis

Overview of Bangladesh's Tariff Framework

Bangladesh operates a multi-layered tariff system. Beyond the basic Customs Duty (CD), importers are subject to Supplementary Duty (SD), Regulatory Duty (RD), Value Added Tax (VAT), Advance Tax (AT), and Advance Income Tax (AIT) — all applied in combination. The 2020 schedule places basic duty rates across five tiers from 0% to 25%, while the effective duty burden (total tax load) averages 27–35%. The National Board of Revenue (NBR) publishes the tariff schedule annually alongside the national budget and may adjust specific rates at any time through Special Regulatory Orders (SROs).

0–25%
Customs Duty (CD)
5 tiers
27–35%
Effective Rate
average
15%
VAT
standard rate
5%
Advance Tax (AT)
at import
5%
Advance IT (AIT)
income tax prepayment
8-digit
HS Code
Bangladesh standard

Tariff Component Structure

Bangladesh Import Duty Components (2020)
Duty ComponentAbbrev.RateTax BaseNotes
Customs DutyCD0 / 1 / 5 / 10 / 25%CIF value5 tiers (raw materials 0–5%)
Supplementary DutySD0–45%CIF + CDLuxury goods / domestic industry protection
Regulatory DutyRD0–5%CIF + CD + SDBudget adjustment instrument
Value Added TaxVAT15%CIF + CD + SD + RDCertain goods exempt
Advance TaxAT5%CIFIncome tax prepayment
Advance Income TaxAIT5%CIFCorporate tax prepayment

Important: each duty component is applied cumulatively. For instance, where CD 25%, SD 20%, RD 3%, VAT 15%, AT 5%, and AIT 5% all apply, the total tax on a CIF value of USD 100 can reach approximately USD 85–90. This phenomenon is known as the "Cascading Tax Effect."

Duty Rates by Product Category

Industrial Raw Materials (Low Duty)
Raw CottonCD 0% + VAT Exempt
Synthetic YarnCD 5% + VAT 15%
Machinery PartsCD 1–5% + VAT 15%
Total Tax Burden15–25%
Finished Goods & Luxuries (High Duty)
Finished GarmentsCD 25% + SD 20%
CosmeticsCD 25% + SD 45%
AutomobilesCD 25% + SD 100–500%
Total Tax Burden80–400%
01
Bonded Warehouse System and RMG Export Duty Exemption
Bangladesh's largest industry, the RMG sector, benefits from a special Bonded Warehouse scheme that exempts all customs duties and VAT on imported raw materials. (1) Bonded license: issued to export factories that are members of BGMEA or BKMEA. (2) Condition: 100% of imported materials must be processed for export. (3) Annual utilization audit required. (4) Duties and VAT are assessed retroactively if goods are sold domestically. This system underpins the cost competitiveness of Bangladesh's RMG exports.
02
SRO (Special Regulatory Orders) and Duty Exemptions
The NBR uses SROs to adjust duties on specific products or end-uses at any time. (1) Industrial machinery: duty reduced to CD 1% under SRO. (2) Agricultural equipment: duty-free. (3) Medical devices: CD reduced to 0–5%. (4) Renewable energy equipment: duty-free. (5) Note: SROs are subject to change with each annual budget — exporters must verify the latest SROs before shipping. More than 200 SROs are currently in effect.
03
Tariff Optimization Strategies for Korean Exporters
(1) Accurate HS classification: the same product can attract very different duties depending on HS code (yarn 5% vs. fabric 10% vs. finished goods 25%). (2) FTA/PTA utilization: while no Korea–Bangladesh FTA exists, certain products benefit from reduced rates under APTA (Asia-Pacific Trade Agreement). (3) SRO exemption verification: reduced rates apply when industrial or medical end-use can be documented. (4) Targeting bonded buyers: exports to RMG bonded factories are duty-free. (5) CIF value management: since the duty base includes freight and insurance, evaluating FOB terms is worth considering.
04
LDC Graduation and the Tariff Outlook
Bangladesh's scheduled LDC graduation in 2026 is expected to bring significant changes to its tariff framework. (1) WTO bound rate compliance: bridging the gap between currently applied rates and WTO-bound ceilings. (2) EU GSP transition: duty-free EBA access will shift to GSP+ or Standard GSP (higher tariffs on Bangladeshi exports). (3) Import liberalization pressure: WTO and IMF pushing for tariff reductions. (4) Impact on Korean companies: in the longer term, lower import duties could improve the export environment. (5) NBR is pursuing gradual tariff modernization and digitization.

Historical Evolution of the Tariff System

2000
Peak CD at 37.5%
↓
2005
Peak CD reduced to 25%
↓
2010
SD coverage expanded
↓
2015
AT and AIT introduced
↓
2020
Current framework
↓
2026
LDC graduation adjustment
Bangladesh Import Trends 2020Import market analysis
Korea–Bangladesh Trade 2020Bilateral trade analysis

Bangladesh's tariff system is complex, with an effective duty burden averaging 27–35%. Korean exporters can optimize tariff costs through accurate HS classification, leveraging SRO exemptions, and targeting bonded warehouse buyers. Advance preparation for the structural changes expected after LDC graduation in 2026 is equally important.

TariffCustoms DutyHS Code2020Import
Bangladesh Tariff Schedule 2020: Duty Rates by HS Code and Import Cost Analysis | Dhaka Trade Portal