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76 RMG firms dodge over Tk322 crore by misusing bond facility

A national daily newspaper reported that the National Board of Revenue (NBR) has identified some 76 Readymade Garment (RMG) companies which have dodged over Tk322 crore in duties by misusing the duty-free bonded warehouse facility.

According to the sources with the NBR the report said that the regulator has spotted gross irregularities and sheer abuse of the bonded warehouse facility through various field-level drives and audits.

Figure: Some 76 Readymade Garment (RMG) companies which have dodged over Tk322 crore in duties by misusing the duty-free bonded warehouse facility.

The customs bond commissionerates in Dhaka and Chattogram, customs houses in Dhaka, Chattogram and Benapole, and Customs Directorate of Customs Intelligence and Investigation (CIID) conducted the drives and audits.

The bonded warehouse, or bond, is the facility provided to 100 percent export-oriented industries for importing inputs/raw materials and packaging materials without paying any duty or taxes. The NBR provides the facility to a wide range of industries to encourage export-oriented industrialization and facilitate exports.

The Customs Law-1969 says exporters, who are entitled to enjoy bonded-warehouse facility for duty-free import of their raw materials, will have to use the products for exports only.

However, according to NBR officials, almost all of the said 76 apparel firms were found selling out bonded products at open market.

Such unholy practice does not only cause huge revenue loss to the government exchequer but also creates uneven competition for local industries.

There are some big names in the list of fraudulent firms, which include Green Factory SQ Celsius Ltd, Fakir Apparels Ltd and Chorka Textile Ltd – a sister concern of PRAN-RFL Group.

Meanwhile, 11 among the companies are said to have been found committing the offence repeatedly. These are BD Designs Private Limited (based on KEPZ), Impress-Newtex Composite Textiles Ltd, Capri Apparels Ltd, Supti Sweater Ltd, Sufi Apparels Ltd, M Uch Apparels Ltd,  Celebrity Export Garments Ltd, Bottom Gallery, Team Apparels, Bestech Ltd and Slaugh Sweater.

Dhaka Customs Bond Commissionerate Commissioner SM M Humayun Kabir sent a report to the NBR chairman on August 19 to informing him of the matter.

Commissioner SM M Humayun Kabir mentioned that they had primary proof of those companies’ involvement in misusing the bonded warehouse facility.

He also said the NBR might send the list to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and request them to cancel the membership of offending companies, if they are found guilty after investigation.

Meantime, NBR Chairman Md Mosharraf Hossain Bhuiyan has given directives to the NBR member (customs export and bond) to talk to Customs Bond Commissionerate Dhaka Commissioner over the suspension of bond license of accused companies and send the list to BGMEA.

BGMEA President Rubana Huq said, “We have not received any letter from the NBR as yet. However, we have come to know about some 66 factories from informal channels.”

“We have contacted the bond commissioner and scheduled a meeting on September 8. We intend to go by the list one by one and then examine them,” Rubana Huq said.

“A random allegation is not justified. We must have a detailed discussion on that day. So, I would request the NBR to share all the cases with us beforehand”, she added.

“We will take action against companies which are found guilty. We do not want the entire garment sector to be damaged by a few organizations,” noted Rubana Huq.

To read original report click here: Original Report

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