476 factories vanish after duty-free imports

Jasim Uddin

A total of 476 factories, mostly in the readymade garment sector, have simply vanished after enjoying duty-free facility in import evading around Tk 726 crore in duties, a survey of the Customs Bond Commissionerate, Dhaka said.
The CBC of the National Board of Revenue on Monday published the list of the factories after conducting physical inspection of all export-oriented factories under the bonded warehouse facility provided by the government.
The CBC has already suspended import-export activities of those companies and asked all customs houses not to allow any imports and exports in the name of those companies, a top official of the CBC New Age on Thursday.
‘We are going to take legal action, including recovery of evaded taxes against the managements of those firms for violating the conditions of bond licences,’ he said.
The CBC has already started freezing the bank accounts of the companies and asked the companies to pay the duties to the government exchequer, he said.
Bond licence holders are supposed to have physical existence but the bond office did not find the existence of those factories, he added.
The government offers the bonded warehouse facility to the export-oriented factories under which the factories can import raw materials without duty on condition that they will export the products manufactured with the raw materials.
The factories must pay the duties and other taxes if they fail to export the products made with those raw materials.
Currently, there are 6,197 listed factories having bond licences for duty-free import of raw materials for manufacturing products for export.
According to the inspection report, of the 476 factories which disappeared, 348 are in the apparel sector and the rest are in plastic, packaging and garment accessories sectors.
Customs bond office claimed Tk 726.50 crore in duties from 314 companies, out of 476, for violating the conditions of the rules of bonded warehouse facility, officials said.
They said that these companies had sold the raw materials, especially fabrics, to the local markets to make higher profits and evade duties.
Traders have to pay higher duty on commercial import of these raw materials.
According to the report, the CBC demanded Tk 45.53 crore in duties from Vega Garments Ltd – the highest amount – followed by Tk 43.66 crore from Wiremech BD Pvt Ltd and Tk 43.32 crore from Abu Plastic Industries for violation of bond facility conditions.
Among others, the CBC demanded Tk 32.49 crore from Phantom Apparels, Tk 30.98 crore from Legend Electronics Pvt Ltd, Tk 25.90 crore from Integrity Apparels Ltd, Tk 21.66 crore from Sanjari Toys Pvt Ltd, Tk 21.20 crore from Meem Packages and Accessories, Tk 17.31 crore from Jacoss Garments Ltd, Tk 16.35 crore from Nice Knitting Apparels Ltd, Tk 16.24 crore from Milan Clothing Ltd, Tk 16.10 crore from Polymar Packaging Industries Ltd, Tk 14.18 crore from Fuji Knit and Fashions Wear Ltd and Tk 12.29 crore from New Wave Bottom Ltd in revenues.

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