Importing steel: specific duties, the rebar trap, and five lines to distrust

Chapter 72 — iron and steel — is the most technically awkward chapter in the Bangladesh tariff. It has only 188 lines, but it contains 17 of the 58 specific-duty lines in the entire tariff, the widest tax spread of any major sector, and a handful of published figures that cannot be taken at face value.

It is also high-volume. Errors here are measured in tonnes, so they get expensive immediately.

Three different tax regimes in one chapter

Total Tax Incidence in chapter 72 runs from 17.88% to 97.39%, with a median of 39.75%. That spread is not a gradient — it is three distinct groups.

1. Flat-rolled products: around 39.75%

Plate, sheet and coil. 72085100 (thickness exceeding 10 mm) carries CD 10%, no SD, no RD, VAT 15%, AIT 5%, AT 7.5% — a TTI of 39.75%. Most of heading 7208 sits at this figure.

2. Bars and rods: around 97.39%

Here the tariff changes character. 72131000 (hot-rolled bars and rods in coils) carries CD of only 5% — lower than the plate above — but SD of 45% and RD of 5%, giving a TTI of 97.39%.

Read that again, because it is counter-intuitive and it matters: the product with the lower customs duty carries two and a half times the total tax. Bars and rods are construction reinforcement, and Bangladesh has a substantial domestic re-rolling industry to protect. Supplementary duty does the protecting; the customs duty column tells you nothing useful.

Anyone costing steel from the CD column alone will be wrong by a factor of two on rebar.

3. Scrap and pig iron: a fixed amount per tonne

All 12 specific-duty lines in chapter 72 are scrap, pig iron and sponge iron. These show no TTI percentage at all, because the tax is charged per tonne rather than on value:

These figures sit in the VAT column, not the customs duty column — which is itself worth knowing. On sugar, the specific amount is the customs duty; on ferrous scrap, it is the VAT. A figure of 1,800 means Taka 1,800 per metric tonne, not 1,800%.

On a 500-tonne scrap consignment at 1,800 per tonne, that element is BDT 900,000 — a real, calculable number. Read as a percentage against a consignment value of, say, BDT 40,000,000 it would imply 720 million, which is obviously absurd but has been quoted in error.

Five lines we corrected, and why

This is unusual, and we would rather say it than hide it.

Five lines in chapter 72 — 72061000, 72071100, 72071200, 72071900 and 72072000, covering ingots and semi-finished products — originally showed a published Total Tax Incidence of 629% to 647%.

Those figures were wrong, and the cause was a unit error. Each of these lines carries the value 600, which is Taka 600 per tonne — a specific duty. Read as a percentage instead, it produces an Advance Income Tax of 600% and totals in the six hundreds.

An AIT rate of 600% is not credible on its face. Across the whole tariff, 98.2% of lines carry AIT of either 5% or 2%, and nothing in the schedule supports 600%. The decisive evidence is nearer to hand: the ten neighbouring lines in the same chapter — pig iron, sponge iron and the whole family of scrap lines — carry the identical 600 entry and are correctly marked as specific-duty lines, showing no percentage at all. Ten lines were handled one way and five the other.

We confirmed the underlying figures against NBR's own operative tariff search, which publishes the same 600 and likewise shows no TTI percentage for these lines.

These five lines are now marked as specific-duty lines and display the duty as published, with no percentage. The statistics in this article are computed on that corrected basis.

A sixth line elsewhere in the tariff had the same fault: 98010090, chandeliers imported as baggage, where Taka 300 per unit was being read as 300% customs duty and producing a published 335%. It has been corrected in the same way.

This is our reading of the data, not an NBR ruling. If you are costing a consignment on any of these six lines, confirm the per-unit amount with NBR or your C&F agent before you commit.

Worked example: steel plate

72085100, 50 tonnes, assessable value BDT 10,000,000. CD 10%, SD 0%, RD 0%, VAT 15%, AT 7.5%, AIT 5%:

39.75%, matching the published figure. Had the same value been rebar under heading 7213 at 97.39%, the tax would have been BDT 9,739,000 — nearly six million taka more on an identical invoice value.

The shape of the chapter

With those six lines correctly classified, chapter 72 contains 171 ad-valorem lines running from 17.88% to 97.39%, averaging 51.03%, alongside 17 specific-duty lines charged per tonne.

That is a moderate chapter by Bangladeshi standards — below the all-tariff average of 61.08%, well below furniture at 95.36%, and far below cosmetics at 122.71%. Steel is an industrial input, and the schedule broadly treats it as one.

Only 26 of 176 lines carry supplementary duty, and the single most common outcome is 39.75%, shared by 72 lines — 41% of the chapter on one figure.

Bars and rods are the exception

Where supplementary duty does appear in chapter 72, it lands almost entirely on one product family. Every line at the chapter's ceiling of 97.39% is a bar or rod:

Note what is happening. Reinforcing bar carries 5% customs duty — among the lowest in the chapter — and still reaches 97.39% because of 45% supplementary duty. Flat-rolled sheet carries double the customs duty at 10% and lands at 39.75% because it carries no SD at all.

Bangladesh has substantial domestic re-rolling capacity for construction steel, and the supplementary duty on bars and rods protects it. Flat products, which are harder to produce locally, are left comparatively open. The customs-duty column tells you almost nothing about which steel products are protected.

The twelve specific-duty lines

Chapter 72 holds 12 specific-duty lines, the second-largest concentration in the tariff after chapter 98. On those lines the duty is a fixed amount per tonne rather than a percentage, so the site shows no single TTI figure for them.

The reasoning is the same as for sugar: steel is a globally traded commodity whose price moves sharply, and a fixed per-tonne duty collects stable revenue regardless. For the importer this means your effective rate is highest exactly when world steel prices are lowest — the moment you would otherwise have bought more.

If you import under one of these lines, your landed-cost model must take tonnage as its input, not invoice value. A spreadsheet built around percentages will quietly produce the wrong answer every time the price per tonne changes.

Practical points for chapter 72

• Never cost steel from the CD column. Supplementary duty, not customs duty, decides the outcome on long products.
• Confirm the unit of quantity on scrap. Metric tonnes against a per-tonne rate; a quantity in kilograms is a 1,000-fold error.
• Thickness and cross-section determine the line. "Exceeding 10 mm" and "4.75 mm or more" are separate lines. Get the mill certificate.
• Treat those five semi-finished lines as unverified until you have confirmation.

Browse chapter 72, or chapter 73 for articles of iron and steel, where the median incidence is higher at 64.25% because those are finished goods rather than raw material.