Editorial, News & commercial office:
55/A, H M Siddique Mansion (Level-7), Purana Paltan, Motijhel C/A, Dhaka-1000. Phone: +8802226640056,
e-mail: [email protected], [email protected]
The National Board of Revenue building in Dhaka
The National Board of Revenue (NBR) has detected revenue evasion worth Tk 102.57 crore by two export-oriented garment manufacturers through alleged misuse of bonded warehouse facilities, including illegal removal and sale of duty-free imported fabrics in the domestic market.
The NBR’s Central Intelligence Cell (CIC) found revenue evasion of Tk94.73 crore by Riyaz Knitwear Ltd and Tk7.83 crore by Lisha Tex (Pvt.) Ltd following separate investigations into their activities.
According to NBR data released on Monday, the two companies allegedly removed imported fabrics from their bonded warehouses and sold them in the local market, while also understating export values and evading value-added tax (VAT).
The total detected revenue loss stands at Tk102 crore 57 lakh 13 thousand 128, the NBR said.
During its investigation, the CIC teams physically inspected the raw material stocks of both companies and cross-checked import and export records with warehouse inventories and information from relevant organisations.
In the case of Riyaz Knitwear, the CIC found that the company had imported 2,862 tonnes of woven polyester fabric under 41 Utilisation Declarations (UDs) through bonded warehouse facilities.
However, around 78 percent, or 2,237 tonnes, of the imported fabric was missing from the factory warehouse, with no corresponding export records. The NBR suspects the fabric was illegally removed from the bonded warehouse and sold in the domestic market.
The inspection also found discrepancies in export records. Although the company reported exports of yarn and knitwear, significant quantities of imported woven polyester fabric remained unaccounted for.
Of the 31 UDs against which no exports were made, imported fabrics under 30 UDs were allegedly removed entirely. In another 10 entries involving partial exports, around 53 percent of the imported fabric remained unaccounted for.
The factory inspection found only 69,382 kg of yarn, 845,397 pieces of finished garments and 25,533.50 kg of woven polyester fabric in stock. The remaining fabric accounted for just 0.89 percent of the total imports.
The NBR also found inconsistencies between the company’s written statement and import records. While its representatives claimed that no garments had been produced or exported using such fabric during the previous month, bill-of-entry records showed imports of around 390 tonnes of fabric in September alone.
The assessable value of the illegally removed fabric was estimated at Tk134.29 crore, resulting in detected customs duty and tax evasion of Tk94 crore 73 lakh 87 thousand 720.
In the case of Lisha Tex, the CIC found that around 174,000 kg of polyester fabric imported under bonded warehouse facilities was missing from the factory.
The NBR estimated customs duty and tax evasion at around Tk6.90 crore from the illegal removal of the fabric alone.
The investigation also found that the company exported more garments than permitted under its approvals but declared lower export values than the contractual prices.
It allegedly procured raw materials locally through local agents outside its approved UDs and failed to meet the mandatory 20 percent value-addition requirement.
The company also purchased accessories for more than 400,000 pieces of garments from the local market without paying applicable VAT.
Furthermore, it allegedly supplied knitwear worth Tk3.23 crore to an unlicensed company, resulting in additional VAT evasion.
The NBR detected total revenue evasion of Tk7 crore 83 lakh 25 thousand 408 by Lisha Tex through these irregularities.
The CIC said it would continue its operations to prevent the misuse of bonded warehouse facilities.
