Importing electronics: how chapter 85 splits from 9.5% to 223.5%
Chapter 85 covers electrical machinery and equipment: phones, batteries, cables, transformers, monitors, motors and consumer electronics. It runs to 412 tariff lines, and its tax incidence spans from 9.5% to 223.5% — a 23-fold range inside one chapter.
Unlike chapter 84, where most lines cluster at 1% customs duty, chapter 85 is genuinely split. Knowing which side of the split your goods fall on is the whole exercise.
The split
| CD rate | Tariff lines | Typically |
|---|---|---|
| 25% | 171 | Finished consumer goods |
| 10% | 119 | Devices and components |
| 1% | 69 | Industrial and capital equipment |
| 5% | 27 | Inputs |
| 15% | 22 | Intermediate goods |
Where chapter 84 had 60% of its lines at 1%, chapter 85 has 42% at 25%. Electrical goods are far more likely to be treated as consumer products, and taxed accordingly.
Four lines that show the whole range
| Code | Goods | CD | SD | VAT | TTI |
|---|---|---|---|---|---|
| 85285210 | Computer monitor, ≤30 inch | 0% | 0% | 0% | 9.5% |
| 85171300 | Smartphones | 25% | 0% | 15% | 64.25% |
| 85076000 | Lithium-ion batteries | 25% | 0% | 15% | 64.25% |
| 85439010 | Electronic cigarettes | 25% | 100% | 15% | 223.5% |
The computer monitor is the interesting one
A computer monitor up to 30 inches carries zero customs duty and zero VAT. Its 9.5% total is AIT at 2% and Advance Tax at 7.5% — both of which a registered business largely recovers.
That is close to free entry, and it is policy: computing equipment supports the IT and services sector. But note the 30-inch boundary. Above it, a display starts to look like a television to the tariff, and televisions are consumer goods. A size threshold is doing enormous work in that line.
This is the chapter-85 pattern in miniature: the same physical category splits on a specification — screen size, capacity, whether it is for industrial or household use.
Worked example: a smartphone consignment
85171300: CD 25%, SD 0%, RD 5%, VAT 15%, AT 7.5%, AIT 5%. On an assessable value of BDT 1,000,000:
| Step | Base (BDT) | Rate | Tax (BDT) |
|---|---|---|---|
| Customs Duty | 1,000,000 | 25% | 250,000 |
| Regulatory Duty | 1,000,000 | 5% | 50,000 |
| Supplementary Duty | 1,300,000 | 0% | 0 |
| VAT | 1,300,000 | 15% | 195,000 |
| Advance Tax | 1,300,000 | 7.5% | 97,500 |
| Advance Income Tax | 1,000,000 | 5% | 50,000 |
| Total tax | 642,500 | ||
That is 64.25%, matching NBR's published TTI. Landed cost before port and agency charges: BDT 1,642,500.
Of that tax, VAT and AT together are 292,500 — recoverable or adjustable for a VAT-registered importer. The genuinely sunk portion is the CD and RD, 300,000. The effective cost of import duty on phones is nearer 30% than 64% if you are properly registered.
Where the 100% supplementary duty appears
Electronic cigarettes at 85439010 carry SD of 100%, lifting the total to 223.5% — the same incidence as an air conditioner in chapter 84. SD in this chapter is not about electronics at all; it marks goods the state wishes to discourage or treats as luxuries.
If a chapter-85 line shows supplementary duty, stop and ask why. The answer is usually that the tariff does not regard the goods as productive equipment, and that reclassification arguments are unlikely to succeed.
The VAT-exempt lines
Across 412 lines, only a handful carry zero VAT, and every one of them is information-technology equipment. The exemption is worth more than any customs-duty concession in the chapter:
| Code | Goods | CD | VAT | TTI |
|---|---|---|---|---|
| 85285210 | Computer monitor, ≤30 inch | 0% | 0% | 9.5% |
| 85235110 | Flash memory card or similar media | 5% | 0% | 14.88% |
| 85176230 | Modem, Ethernet card, network switch, hub | 10% | 0% | 20.25% |
Note what the VAT exemption does to the arithmetic. The modem at 10% customs duty lands at a total of 20.25%. A smartphone at 25% customs duty lands at 64.25%. The customs duty differs by 15 points; the total differs by 44. VAT is charged on the value plus the duties already added, so removing it removes a multiplier, not a line item.
This is why reading only the CD column misleads. Two lines with the same customs duty can differ by fifty points of total incidence depending on whether VAT applies.
Regulatory duty is not an edge case here
169 of the 412 lines — 41% — carry 5% regulatory duty. In chapter 85, RD is closer to the norm than the exception, and it is the column most often missing from older spreadsheets and quotations.
| RD rate | Lines |
|---|---|
| 0% | 242 |
| 5% | 169 |
| 10% | 1 |
Five percent sounds minor. It is not, because RD enters the base before VAT and AT are calculated. On the smartphone example, the 5% RD adds BDT 50,000 of regulatory duty itself, then drags a further BDT 11,250 of VAT and AT behind it — BDT 61,250 of effect from a 5% line. Omit RD from a quotation and you understate the landed cost by roughly 6%, which is larger than most importers' margin.
Where supplementary duty bites
Fifty-one lines in chapter 85 carry SD. The distribution shows it is not scattered randomly:
| SD rate | Lines | Typically |
|---|---|---|
| 100% | 2 | Electronic cigarettes and vaping devices |
| 45% | 1 | Discharge lamps |
| 30% | 2 | Co-axial cable, loaded circuit boards |
| 20% | 38 | Lamps, conductors, SIM cards, consumer fittings |
| 10% | 8 | Assorted consumer items |
The 20% band is the one to watch, because it is large and unglamorous. It captures everyday items — electric conductors at 85444200, SIM cards at 85423910, lamps at 85392990 — all landing at 96.1%. These are not luxury goods, but the tariff treats them as finished consumer products.
Worked example: co-axial cable at 112.03%
85442000: CD 25%, RD 5%, SD 30%, VAT 15%, AT 7.5%, AIT 5%. On an assessable value of BDT 1,000,000:
| Step | Base (BDT) | Rate | Tax (BDT) |
|---|---|---|---|
| Customs Duty | 1,000,000 | 25% | 250,000 |
| Regulatory Duty | 1,000,000 | 5% | 50,000 |
| Supplementary Duty | 1,300,000 | 30% | 390,000 |
| VAT | 1,690,000 | 15% | 253,500 |
| Advance Tax | 1,690,000 | 7.5% | 126,750 |
| Advance Income Tax | 1,000,000 | 5% | 50,000 |
| Total tax | 1,120,250 | ||
Follow what the 30% supplementary duty actually did. It added BDT 390,000 of its own, then raised the VAT base from 1,300,000 to 1,690,000, pulling a further BDT 58,500 of VAT and BDT 29,250 of AT with it. A 30% rate produced BDT 477,750 of tax — 47.8% of the goods' value.
Supplementary duty is the most expensive column in the tariff precisely because everything downstream is calculated on top of it. When an SD line can plausibly be argued into a non-SD line, that argument is worth more than any freight negotiation.
Solar and renewables are deliberately cheap
Photovoltaic cells at 85414200 and solar lanterns at 85131010 both carry zero customs duty and land at 27.5% — 15% VAT plus AT and AIT, with no duty at all. Against a chapter average of 52.09%, that is a deliberate policy concession.
For a VAT-registered importer the real cost is lower still: of that 27.5%, the VAT and AT components are recoverable or adjustable, leaving almost nothing genuinely sunk. Solar equipment is among the cheapest things you can import into Bangladesh.
Practical points for chapter 85
- Specifications decide the line. Screen size, battery capacity, voltage, industrial versus domestic use. Get the technical datasheet before classifying, not after.
- Check the VAT column, not just CD. Several lines in this chapter are VAT-exempt, which changes the economics far more than a few points of customs duty.
- Components and finished goods diverge sharply. A battery at 25% CD inside a device assembled locally may be taxed more heavily than the finished device imported whole — or far less. Check both routes before committing to an assembly model.
- Watch for RD. It appears on many lines here and is the column most likely to have changed since any published reference.
Browse chapter 85 in full, or compare with chapter 84 to see how differently mechanical and electrical equipment are treated.