Dhaka, Bangladesh
Bonded-warehouse boon turned cash cow

Bonded-warehouse boon turned cash cow

Big apparel cos also milking

Badiul Alam Government's revenue agency is considering taking action against a number of readymade garment companies on charges of misusing bonded-warehouse facilities that allow duty-free import, sources said. The Customs Commissioners of the National Board of Revenue (NBR) looking after the bonded-warehouse facilities in Dhaka, Chattogram and Beanpole reported the "misuse" of warehouse facilities. Such findings are also corroborated by a report of the Customs Intelligence and Investigation Directorate (CIID), according to the sources. Cent-percent export-oriented industries are eligible to use the bonded-warehouse facilities for importing different kind of raw materials and packing materials without paying any duty or taxes. This duty waiver is provided to ensure competitive advantage of RMG products on the international market. On average, Bangladesh earns USD33-34 billion by exporting RMG products and the government has set its sights high on USD50 billion from the apparel export by the year 2021. According to the Customs Law, the export-oriented industries use bonded-warehouse facilities for export purpose and strict bar has been imposed on selling the raw materials on the local market. But, investigation has revealed that a large number of garment factories are settling bonded products in the open market, which deprived the national exchequer of earning huge amounts of revenue. "Not only that the government is losing huge revenues because of unholy practices adopted by a section of the RMG owners but it has also created discomfort for the local textile industries," said one of the sources. It has been estimated by the NBR that, because of misuse of bonded facilities, the national exchequer was deprived of more than Tk 300 crore in the last financial year. The NBR sources said that "all the offending industries will face stern action," which would include penalty and cancellation of bond facilities. The list of the offending industries would also be sent to the BGMEA with the request for cancellation of the BGMEA membership. The Bangladesh Garment Manufacturers and Exporters Association or BGMEA membership is mandatory for export of the RMG products, the source said. Names of some big shots in the industry have surfaced as offender. It has also revealed that a good number of RMG factories have committed such fraudulent practices repeatedly.

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