The National Board of Revenue (NBR) is moving to abolish the manual VAT refund system for jute and leather exporters, transitioning all claims to its automated e-VAT platform. The initiative aims to enhance transparency with minimize revenue leakage and expedite long-overdue refund payments.
Currently, exporters in these two sectors can claim VAT refunds manually on raw materials through the Duty Exemption and Drawback Office (DEDO) under a special provision introduced in March 2023. However an internal NBR note from July 7, 2026 prepared by the VAT Implementation Wing the proposes canceling the General Order that enables this manual process.
Operating parallel manual and digital systems creates significant verification challenges and revenue risks according to NBR officials. Under the proposed framework, exporters will receive refunds directly through their local VAT commissionerates via an automated data identification system. Approved refunds will be transferred directly to exporters' designated bank accounts using the iBAS++ system eliminating the need for in-person visits to tax offices.
Syed Mushfequr Rahman the NBR Member (VAT Implementation and IT) confirmed that all VAT refunds must eventually be processed strictly through e-VAT returns. He noted that while VAT commissionerates will handle VAT refunds the DEDO will continue processing customs and regulatory duty drawbacks manually until its own operations are automated under the NBR's Strengthening Revenue Mobilisation Project (SRMP).
Customs officials highlighted that DEDO currently faces legal and practical hurdles with a lack of access to VAT return databases and conflicting provisions between the VAT Act and VAT Rules.
While the total amount of pending refund claims for jute and leather remains uncompiled the industry leaders have voiced support for full automation. Reza-e-Azam, Secretary General of the Bangladesh Jute Spinners Association (BJSA) welcomed the move to reduce bureaucracy and speed up payments. However, he noted that because jute exports are VAT-exempt and many exporters previously failed to file nil returns. He urged the NBR to clear existing and long-standing claims through DEDO before fully enforcing the e-VAT mandate.
The NBR plans to consult trade representatives from both sectors before finalizing the transition.
