The National Board of Revenue is going to review the current policy measures with a view to prevent duty evasions by businesses through the misuse of duty-free import facility, officials said. Rationalisation of the duty structure for export-oriented industries and commercial importers would be the main focus of the review, they said. ‘We are considering reducing the duty incidence differences between duty-free imports, known as bonded warehouse facility, and commercial imports to prevent such misuse,’ an NBR high official told the New Age last week. Usually, the duty for a product is very high in case of commercial import. On the other hand, the bond licence holders, mainly export-oriented industries, enjoy duty-free benefits for the same product, he said. Reduction of the duty differences will make commercial import more competitive and discourage leakage of bonded products, mainly fabrics, garment accessories, paper, plastic grain, and printing and packaging materials, as it will make the sales of bonded products on the local market less profitable, he said. In addition, the administrative procedures including examination of the accuracy of utilization declaration on duty-free import facility issued by the RMG exporters’ associations will be strengthened to ensure proper use of the incentive, he said. The NBR has taken the move in the wake of an increasing trend of duty evasion in recent years, violating the conditions to enjoy the facility given by the NBR. There are numerous allegations that importers enjoying bonded warehouse facility sell the bonded products on the domestic market. Under the facility, export-oriented industries, mainly the RMG sector and its linkage industries, enjoy duty-free import of raw materials required for production of export items on condition that they will produce finished goods using the raw materials and then export the products. Sale of bonded products on the local market is prohibited. But, according to the NBR, the government loses around Tk 58,000 crore in duties a year due to the misuse of the bonded facility. The Customs Intelligence and Investigation Directorate of the NBR detected that only 15 export-oriented industries evaded Tk 342 crore in duties through selling the bonded products on the domestic market in the last eight months (July-February) of the current fiscal year. The companies imported accessories, paper and carton for readymade garment industries for export purpose. Commercial importers have also been filing allegations to the revenue board about the misuse of the facility that hurt their business interests. Federation of Bangladesh Chambers of Commerce and Industry President Abdul Matlub Ahmad in last week urged the NBR to strengthen its monitoring activities on importers enjoying the bonded warehouse facility to prevent siphoning off bonded products. As part of the review, the customs intelligence has proposed that the NBR should withdraw the 15 per cent value-added tax on commercial import of TPMC (thermoplastic moulding compound) following a significant leakage of TPMC imported under the bond licence, officials said. The NBR has also taken a move to settle a case related to cancellation of the home consumption bond which is now pending with the court.
