The National Board of Revenue (NBR) has decided to go tough on errant traders misusing the bonded warehouse facility offered to them in the name of their export oriented industries, and costing the government much needed revenue, reports. A senior official of the Bond Commissionerate told UNB that they have found misuse of this bond facility increased significantly in recent times, causing a huge revenue loss for the revenue collecting authority. “That’s why we have decided to intensify our drive against these traders,” he said. He also said that the NBR chairman is very serious about clamping down on this misuse and he has directed all officials concerned to be vigilant. Under the bonded warehouse system, the export-oriented industries are allowed to import duty-free fabrics. The license is given to import raw materials without any duty charges against a commitment to export the finished products, which makes exports more competitive. Eighty percent of the fabric imported under this facility must be exported, while the rest 20 percent is allowed as wastage. The facility is important to export-oriented industries, especially the garment factories, in reducing lead-time and keeping product prices competitive. But a section of businessmen misuse the bonded warehouse facility by selling the duty-free imported raw materials and finished goods in the local market, instead of using them in their own production line. License holders also sometimes use fake addresses to escape the monitoring mechanism of the customs authorities, while some deliberately neglect maintaining records of their export and import activities, that opens up opportunities for abusing the facility. All the imported goods are stored at the bondholder’s warehouses, and in case of failure to export, the importers have to pay duty charges and taxes for the rest of the goods imported. According to NBR sources, the bond commissionerate recently sent a demand letter to an RMG factory of Tk 85 lakh for not using its clothes imported under the legal system abroad. The Customs Intelligence and Investigation Directorate (CIID) recently found irregularities relating to bonded warehouse in a factory situated in the Adamjee EPZ. The industry imported raw materials worth Tk 6.30 crore under the bond system. Through the irregularities this factory raked in additional revenue amounting to Tk 2.39 crore, according to the customs intelligence.
