Customs Bond Commissionerate (CBC) in Dhaka said two export-oriented apparel companies had evaded duty of around Tk12 crore misusing the duty-free bonded warehouse facility. During spot inspections recently, officials found the KC Apparels Limited and M/S Knit Concern Limited, sister concerns of a same business group, storing much higher amounts of raw materials in the bonded warehouses than that registered. The companies are fully export-oriented composite knit industry located at Godanail Road in Narayanganj. The raw materials were imported under the duty-free benefits by the export-oriented factories for the use in their manufacturing only. But they allegedly sell the extra raw materials to local market. The bonded warehouse is place or area where dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. According to a report by four-member CBC inspection team, KC Apparels stored 985,920 kg of cotton yarn imported misusing the bonded warehouse facility. The original value of the material is Tk19.76 crore while its taxable value is Tk20.16 crore with the company evading Tk7.47 crore tax. As per the another inspection report prepared on the same factory, 374,871.40 kg chemical and 13,990 kg dyes were found higher in its warehouse and 360,971.25 kg of salt was found less compared to the register. The price of the raw materials is Tk12.32 crore, where the taxable value of the product amounts to Tk12.57 crore. The inspection found that the company evaded Tk3.93 crore. Same situation was in the Knit Concern Ltd. According to the inspection report, the company stored 25,849 kg chemical and 15,125 kg dyes additionally, while 98,150 kg of salt was not found stored. The total value of the raw materials is Tk1.87 crore, but the sum will increase to Tk1.90 crore if duties are imposed. As per the CBC report, the Knit Concern Limited evaded Tk59.84 lakh. The taxmen can now confiscate the goods and the people behind the irregularity can now be liable to a penalty not exceeding (five times) the value of the goods, according to the sections of Customs Act, 1969. The section also empowers the taxmen to punish the guilty of rigorous imprisonment for a term not less than three months but not exceeding two years. CBC officials said that a group of corrupt businessmen made huge amounts of money after availing bonded warehouse facility, a duty-waiver benefit on import of raw materials only for the export-oriented industries. Currently, export-oriented factories can avail the duty-free facility on import of raw materials on condition of export of the finished products manufactured with the inputs. The core condition for availing this facility is that the exporters cannot sell the finished products produced with duty-free imported raw materials on the local market. CBC sources said that some 6,197 export-oriented factories are now availing bonded warehouse licences, among which, 3,909 are active importers and exporters. Among them, 80% of the factories are from the RMG sector. A section of businessmen are abusing the facility and selling the raw materials in local market violating the conditions, a high official said. He said the benefit is mostly abused by the RMG factories. The official said the CBC has to work with the limited manpower and so it cannot monitor perfectly.
