Textile News, Apparel News, RMG News, Fashion Trends
News & Analysis

Decoding China’s duty-free facility for the knitwear sector of Bangladesh: Provisions and the product-wise tariff (Part-2)

Coverage of China’s zero-tariff facility for Bangladesh Knitwear Sector

China’s Duty-Free (DF) facility declared for Bangladesh covers 132 knitted or crocheted garment items and clothing accessories which are detailed out with respective product descriptions in Table-1 below.

Decoding China’s duty-free facility for the knitwear sector of Bangladesh: The Chinese market dynamics (Part-1)
Figure: Bangladesh has an incredible opportunity to catch up more share of the pie addressing the top 10 imported knitwear items by China from the World.

Table-1 represents the different products under the HS Code 61 category which are given a duty-free facility to Bangladesh, while other countries except for bilateral or regional signatories of FTA/PTA with China have to pay Most-favored-nation (MFN) tariff up to 10 percent.

The yellow marked HS code product lines in the Table-1 are the top 25 knitwear export items of Bangladesh to China, indicatively, this means, Bangladesh can seize greater market share using this DF facility as Bangladesh is already competitive in these items exporting to China.

Table-1: List of knitwear items under the coverage of China’s Duty-Free Facility offered to Bangladesh. Data Source: ITC Trade Map. Data Calculation: Latifee, E. H., and Uddin, M. M., 2020.
Sl# Tariff number (HS Code) Product Description MFN Tax Rate (%) Conventional Tax Rate (%) Preferential Tax Rate (%) to Bangladesh Ordinary Tax Rate (%)
1.        6101.2 -Cotton 8 0 0 90
2.        6101.3 -Chemical fiber 8 0 0 130
3.        6101.901 —Made of wool or fine animal hair 10 0 0 130
4.        6101.909 —other 8 0 0 130
5.        6102.1 -Made of wool or fine animal hair 10 0 0 130
6.        6102.2 -Cotton 8 0 0 90
7.        6102.3 -Chemical fiber 8 0 0 130
8.        6102.9 -Made of other textile materials 10 0 0 130
9.        6103.101 —Made of wool or fine animal hair 10 0 0 130
10.    6103.102 —Synthetic fiber 10 0 0 130
11.    6103.109 —Made of other textile materials 8 0 0 130
12.    6103.22 –Cotton 10 0 0 90
13.    6103.23 –Synthetic fiber 10 0 0 130
14.    6103.291 —Made of wool or fine animal hair 10 0 0 130
15.    6103.299 —other 10 0 0 130
16.    6103.31 –Made of wool or fine animal hair 6 0 0 130
17.    6103.32 –Cotton 6 0 0 90
18.    6103.33 –Synthetic fiber 8 0 0 130
19.    6103.39 –Made of other textile materials 6 0 0 130
20.    6103.41 –Made of wool or fine animal hair 6 0 0 130
21.    6103.42 –Cotton 6 0 0 90
22.    6103.43 –Synthetic fiber 8 0 0 130
23.    6103.49 –Made of other textile materials 6 0 0 130
24.    6104.13 –Synthetic fiber 10 0 0 130
25.    6104.191 —Made of wool or fine animal hair 8 0 0 130
26.    6104.192 —Cotton 8 0 0 90
27.    6104.199 —other 8 0 0 130
28.    6104.22 –Cotton 8 0 0 90
29.    6104.23 –Synthetic fiber 10 0 0 130
30.    6104.291 —Made of wool or fine animal hair 8 0 0 130
31.    6104.299 —Made of other textile materials 6 0 0 130
32.    6104.31 –Made of wool or fine animal hair 6 0 0 130
33.    6104.32 –Cotton 6 0 0 90
34.    6104.33 –Synthetic fiber 10 0 0 130
35.    6104.39 –Made of other textile materials 6 0 0 130
36.    6104.41 –Made of wool or fine animal hair 6 0 0 130
37.    6104.42 –Cotton 6 0 0 90
38.    6104.43 –Synthetic fiber 8 0 0 130
39.    6104.44 –Man-made fiber 6 0 0 130
40.    6104.49 –Made of other textile materials 6 0 0 130
41.    6104.51 –Made of wool or fine animal hair 6 0 0 130
42.    6104.52 –Cotton 6 0 0 90
43.    6104.53 –Synthetic fiber 6 0 0 130
44.    6104.59 –Made of other textile materials 6 0 0 130
45.    6104.61 –Made of wool or fine animal hair 6 0 0 130
46.    6104.62 –Cotton 6 0 0 90
47.    6104.63 –Synthetic fiber 8 0 0 130
48.    6104.69 –Made of other textile materials 6 0 0 130
49.    6105.1 -Cotton 6 0 0 90
50.    6105.2 -Chemical fiber 8 0 0 130
51.    6105.9 -Made of other textile materials 6 0 0 130
52.    6106.1 -Cotton 6 0 0 90
53.    6106.2 -Chemical fiber 8 0 0 130
54.    6106.9 -Made of other textile materials 6 0 0 130
55.    6107.1100 –Cotton 6 0
4.2 CH
5.6 KR
0 90
56.    6107.12 –Chemical fiber 6 0 0 130
57.    6107.191 —Silk and spun silk 6 0 0 130
58.    6107.199 —other 6 0 0 130
59.    6107.2100 –Cotton 6 0
4.2 CH
5.6 KR
0 90
60.    6107.22 –Chemical fiber 6 0 0 130
61.    6107.291 —Silk and spun silk 6 0 0 130
62.    6107.299 —other 6 0 0 130
63.    6107.91 –Cotton 6 0 0 90
64.    6107.991 —Chemical fiber 6 0 0 130
65.    6107.999 —other 6 0 0 130
66.    6108.11 –Chemical fiber 6 0 0 130
67.    6108.191 —Cotton 6 0 0 90
68.    6108.192 —Silk and spun silk 6 0 0 130
69.    6108.199 —other 6 0 0 130
70.    6108.21 –Cotton 6 0 0 90
71.    6108.22 –Chemical fiber 6 0 0 130
72.    6108.291 —Silk and spun silk 6 0 0 130
73.    6108.299 —other 6 0 0 130
74.    6108.3100 –Cotton 6 0
4.2 CH
5.6 KR
0 90
75.    6108.32 –Chemical fiber 6 0 0 130
76.    6108.391 —Silk and spun silk 6 0 0 130
77.    6108.399 —other 6 0 0 130
78.    6108.91 –Cotton 6 0 0 90
79.    6108.92 –Chemical fiber 6 0 0 130
80.    6108.99 –Made of other textile materials 6 0 0 130
81.    6109.1 -Cotton 6 0 0 90
82.    6109.901 —Silk and spun silk 6 0 0 130
83.    6109.909 —other 6 0 0 130
84.    6110.11 –Woolen 6 0 0 130
85.    6110.12 –Cashmere goat fine wool 6∆5 0 0 130
86.    6110.191 —Other goat fine hair 6 0 0 130
87.    6110.192 —Rabbit fur 6 0 0 130
88.    6110.199 —other 6 0 0 130
89.    6110.2 -Cotton 6 0 0 90
90.    6110.3 -Chemical fiber 6 0 0 130
91.    6110.901 —Silk and spun silk 6 0 0 130
92.    6110.909 —other 6 0 0 130
93.    6111.2 -Cotton 10 0 0 90
94.    6111.3 -Synthetic fiber 10 0 0 130
95.    6111.901 —Made of wool or fine animal hair 10 0 0 130
96.    6111.909 —other 10 0 0 130
97.    6112.11 –Cotton 6 0 0 90
98.    6112.12 –Synthetic fiber 8 0 0 130
99.    6112.19 –Made of other textile materials 6 0 0 130
100.            6112.201 —Cotton 6 0 0 90
101.            6112.209 —other 10 0 0 130
102.            6112.31 –Synthetic fiber 8 0 0 130
103.            6112.39 –Made of other textile materials 6 0 0 130
104.            6112.41 –Synthetic fiber 8 0 0 130
105.            6112.49 –Made of other textile materials 6 0 0 130
106.            6113 Use tax heading 59.03, 59.06 or 59.07 needles 6 0 0 130
107.            6114.2 -Cotton 6 0 0 90
108.            6114.3 -Chemical fiber 8 0 0 130
109.            6114.901 —Made of wool or fine animal hair 6 0 0 130
110.            6114.909 —other 6 0 0 130
111.            6115.1 -Gradually tighten socks (for example, to treat static 6 0 0 130
112.            6115.21 –Each monofilament whose fineness is below 67 dtex 6 0 0 130
113.            6115.22 –The fineness of each filament is 67 dtex and above 6 0 0 130
114.            6115.291 —Cotton 6 0 0 90
115.            6115.299 —other 6 0 0 130
116.            6115.3 -Women’s stockings and half stockings, each monofilament 6 0 0 130
117.            6115.94 –Made of wool or fine animal hair 6 0 0 130
118.            6115.95 –Cotton 6 0 0 90
119.            6115.96 –Synthetic fiber 6 0 0 130
120.            6115.99 –Made of other textile materials 6 0 0 130
121.            6116.1 -Impregnated, coated or coated with plastic or rubber 6 0 0 130
122.            6116.91 –Made of wool or fine animal hair 6 0 0 130
123.            6116.92 –Cotton 6 0 0 90
124.            6116.93 –Synthetic fiber 6 0 0 130
125.            6116.99 –Made of other textile materials 6 0 0 130
126.            6117.1011 —-Cashmere 6 0 0 130
127.            6117.1019 —-other 6 0 0 130
128.            6117.102 —Woolen 6 0 0 130
129.            6117.109 —other 6 0 0 130
130.            6117.801 —Tie and bow tie 6 0 0 130
131.            6117.809 —other 6 0 0 130
132.            6117.9 -Components 6 0 0 130

General provisions

Processing or manufacturing with materials fully or partially originating from non-beneficiary countries leads to a value addition of no less than 40 percent of the free-on-board (FOB) price of the final goods; thus, in the formula below, an ad-valorem percentage of 40 percent or greater will fall under the DF benefit umbrella of China provided to Bangladesh. The value addition is calculated as below:

Ad valorem (%) = {(FOB – CIF)/FOB} * 100

Where, FOB= Free-on-board price of the final good; CIF= ‘Cost of insurance and freight’ price of the non-locally originated materials.

More to that, there is no safeguard clause to be applied on Bangladesh as the country is treated as a least-developed country (LDC).

Specific provisions for the knitwear sector:

  1. This Chapter applies only to made up knitted or crocheted products.
  2. This Chapter does not cover:
  1. Goods of Tax 62.12;
  2. Worn clothing or other worn products of Tax 63.09; or
  3. Orthopedic appliances, surgical belts, trusses or the like (Tax 90. 21).
  1. For the purposes of Tax 61. 03 and 61.04:

(a) The term “suit” means a set of garments composed of two or three pieces made up, in respect of their outer surface, in identical fabric and comprising:

One suit coat or jacket the outer shell of which, exclusive of sleeves, consists of four or more panels, designed to cover the upper part of the body, possibly with a tailored waist coat in addition whose front is made from the same fabric as the outer surface of the other components of the set and whose back is made from the same fabric as the lining of the suit coat or jacket, and one garment designed to cover the lower part of the body and consisting of trousers, breeches or shorts (other than swimwear), a skirt or a divided skirt, having neither braces nor bibs.

All of the components of a suit must be of the same fabric construction, style, color and composition; they must also be of corresponding or compatible size. However, these components may have bindings of different fabric (the narrow fabric stitched to finish raw edges).

If several separate components to cover the lower part of the body are presented together (for example, trousers and shorts, or a skirt or divided skirt and trousers), the constituent lower part shall be one pair of trousers, or, in the case of women’s or girls’ suits, the skirt or divided skirt, the other garments being considered separately.

The term “suit” includes the following sets of garments, whether or not they fulfill all the above conditions:

(i) morning dress, comprising a plain jacket (cutaway) with rounded tails hanging well down at the back and striped trousers;

(ii) evening dress (tailcoat), generally made of black fabric, the jacket of which is relatively short at the front, does not close and has narrow skirts cut in at the hips and hanging down behind;

(iii) dinner jacket suits, in which the jacket is similar in style to an ordinary jacket (though perhaps revealing more of the shirt front), but has shiny silk or imitation silk lapels.

(b)The term “ensemble” means a set of garments (other than suits and products of Tax 61.07, 61.08 or 61.09), composed of several pieces made up in identical fabric, put up for retail sale, and comprising:

One garment designed to cover the upper part of the body, with the exception of pullovers which may form a second upper garment in the sole context of twin sets, and of waistcoats which may also form a second upper garment, and one or two different garments, designed to cover the lower part of the body and consisting of trousers, bib and brace overalls, breeches, shorts (other than swimwear), a skirt or a divided skirt.

All of the components of an ensemble must be of the same fabric construction, style, color and composition; they also must be of corresponding or compatible size. The term “ensemble” does not apply to track suits or ski suits, of Tax 61.12.

  1. Tax 61.05 and 61. 06 do not cover garments with pockets below the waist, with a ribbed waistband or other means of tightening at the bottom of the garment, or garments having an average of less than 10 stitches per linear centimeter in each direction counted on an area measuring at least 10cm x 10cm. Tax 61. 05 does not cover sleeveless garments.
  2. Tax 61.09 does not cover garments with a drawstring, a ribbed waistband or other means of tightening at the bottom of the garment.
  3. For the purposes of Tax 61.11:
  1. The expression “babies’ garments and clothing accessories” means products for young children of a body height not exceeding 86cm;
  2. Products which are, prima facie, classifiable both in Tax 61. 11 and in other Tax of this Chapter are to be classified in Tax 61.11.
  1. For the purposes of Tax 61. 12, “ski suits” means garments or sets of garments which, by their general appearance and texture, are identifiable as intended to be worn principally for skiing (cross-country or alpine). They consist either of:
  1. A “ski overall”, that is, a one-piece garment designed to cover the upper and the lower parts of the body; in addition to sleeves and a collar the ski overall may have pockets or foot-straps; or
  2. A “ski ensemble”, that is, a set of garments composed of two or three pieces, put up for retail sale and comprising:

One garment such as an anorak, wind-cheater, wind-jacket or similar article, closed by a slide fastener (zipper), possibly with a waistcoat in addition, and-one pair of trousers whether or not extending above waist-level, one pair of breeches or one bib and brace overall.

The “ski ensemble” may also consist of an overall similar to the one mentioned in paragraph (a) above and a type of padded, sleeveless jacket worn over the overall.

All the components of a “ski ensemble” must be made up in a fabric of the same texture, style and composition whether or not of the same color; they also must be of corresponding or compatible size.

  1. Garments which are, prima facie, classifiable both in Tax 61.13 and in other Tax of this Chapter, excluding Tax 61.11, are to be classified in Tax 61.13.
  2. Garments of this Chapter designed for left over right closure at the front shall be regarded as men’s or boys’ garments, and those designed for right over left closure at the front as women’s or girls’ garments. These provisions do not apply where the cut of the garment clearly indicates that it is designed for one or other of the sexes. Garments which cannot be identified as either men’s or boys’ garments or as women’s or girls’ garments are to be classified in the Tax covering women’s or girls’ garments. 651 Products of this Chapter may be made of metal thread.

Views expressed here are not from the organization that the authors represent.  

(To be continued…)

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

Related posts

Chinese exports drop dramatically due to Coronavirus epidemic

Textile Today

Trump presses the pause button for US-China trade war at G20 summit

Textile Today

How can you grow your business with duty-free facility in Chinese market through Alibaba?

Textile Today

Latest Publications

View All