According to sources with the NBR, the regulator has spotted gross irregularities and sheer abuse of the bonded warehouse facility through various field-level drives and audits
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 sources with the NBR, the regulator has spotted gross irregularities and sheer abuse of the bonded warehouse facility through various field-level drives and audits.
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.
Being asked for comment over the issue, BGMEA President Rubana Huq on Wednesday 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 told The Business Standard.
“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.
Who are the revenue dodgers?
Sources said out of the 76 firms, 17 are under the Customs Bond Commissionerate Office. These companies have reportedly dodged over Tk3.53 crore in revenue.
These RMG factories are: Dhaka-based Nipa Knitwear, Savar-based Reza Fashions Ltd, Gazipur-based Trouser World Pvt Ltd, Mohammadpur-based Celebrity Export Garments ltd, Dhaka-based Syntax Textile S Apparels, Gazipur-based Utah Knitting and Dyeing Ltd, Mirpur-based Kardial Design Ltd, Al Islam Tex Ltd, Karotoa Apparels Ltd, Kaysar Sanco JB Textile, TnZ Apparels, Bottom Gallery, Apex Lingerie Ltd, Genesis Fashions Ltd and Lavender Garment Ltd.
The Customs Directorate of Customs Intelligence and Investigation (CIID) has uncovered irregularities of some 13 companies and realized Tk275.82 crore. Of the amount, Tk120 crore has been paid by Mastex Industries Ltd while Iman Textile has paid Tk85.12 crore.
Those RMG companies are: Mastex Industries Ltd, Ashiana Garments Ltd, Capri Apparels, Naf Fashion Ltd, Misuware Hosiery ltd, Apparels Options, Fashion Create Ltd, DK Apparels Ltd, Cassiopeia Sweaters Ltd, Iman Textiles Ltd and JAB Ltd.
Chattogram Customs House has uncovered irregularities of three companies which have reportedly evaded revenue worth Tk1.31 crore. Customs officials have also mentioned that most of these companies have accepted their responsibility and paid the dodged revenue.
Those RMG companies include – M Uch Apparels, A R H Kint composite ltd, Crossline Knit Fabrics Ltd, Designer Fashion Ltd, Garment Home Pvt Ltd, Green World Fashion Ltd, Knit Bazar Pvt Ltd, Sparrow Apparels Ltd, Sufi Apparels Ltd and Supti Sweater Ltd.
The Chattogram Bond Commissionerate has identified 19 companies which have reportedly dodged revenue worth Tk44.05 crore.
Those RMG companies are: Chittagong based TKM Garments, Adil Apparels, Focus Apparels, Montex Apparels, Azmine Fashions, Pretty Apparels, SAARC garment, Fashion Crete Apparels, Axiom Fashion, Ocean Apparels, Team Apparels, Ape Bake Mail, and A and B outwear ltd, Karnaphuli EPZ-based Venkat Limited, Hong Kong denim (pvt) Ltd and BD Design and Bestech Ltd.
In addition, Dhaka Customs House identified three dodgers — Marina Apparels, T&Z Apparels and Oasis Fashions.
Meanwhile, Benapole Customs House also identified 10 revenue dodgers but the amount has not been calculated yet.
The RMG companies are: Narsingdi-based Charka Textile, Gazipur-based Slaugh Sweater, Savar-based Fabrica Knit Composite, Gazipur-based Your Fashion Sweater, Tangail-based Impress Newtex Composites, Narayanganj-based Fakir Apparels, Gazipur-based Narban Comtex Ltd and Gazipur-based SQ Celsius Limited.