|
The central intelligence cell (CIC) of the National Board of Revenue (NBR) has recently detected a serious abuse of tax holiday facility by a fake food industry located at the premises of a steel mill owned by a Chittagong-based big business group.
The NBR cell estimates the tax evasion to the extent of Tk 450 million by the fake company, named, Smile Food Products Ltd.
According to a report prepared by the CIC, Smile Food is situated inside the Steel Mills compound at Sitakhunda in Chittagong that availed itself of tax holiday incentive against the import of food items, including chick peas, wheat, lentil, peas, maize and sugar. The unit in question imported over 0.5 million metric tonnes of food items between 2001 and 2004.
Though the unit was supposed to process food items using the imported flour, suji and pulses, the CIC intelligence team at the time of its investigation did not find the required machinery, warehouse and even manpower to run the factory.
The company imported raw materials worth Tk 5.79 billion during the last four years. All the materials were sold in the local market instead of processing those.
It also illegally imported 7.9 billion kgs of sugar till October 2004 though sugar is not at all required for the items the unit was supposed to produce, the report added.
"This is the most sensational case by the CIC since it began its activities last year and the investigation established a link between the fake company and the big business house," said a senior NBR official.
Already action has been started against the companies and an NBR official involved in the scam, he said.
As part of action, the NBR had already cancelled the tax holiday certificate of the Smile Food and directed the concerned department not to refund nearly Tk 11.0 million in Advance Income Tax (AIT) payment, sources said.
The NBR has begun disciplinary action against a deputy commissioner who helped the fake company to get tax holiday incentive during 2001 in Dhaka.
It has also directed its different wings to trace the bank account, payment of Letter of Credits (LCs) and other financial activities of the company, they added.
The NBR took actions when directors of Smile Food Mahfuzul Haq and Golam Mosfta did not make any reply to respond to official communications last month.
Besides the CIC report said its investigation team found signboard of the Ismail Food at the South East part of the steel mill in question.
"Mechanical engineer of the said Steel Mill discouraged the NBR probe team from inspecting the factory," said the CIC report adding that they entered factory after breaking open the door.
While entering the factory, the team found six rusted wheat-crashing machines and 50 to 60 bags of rotten goods. The space at the warehouse and the factory were found to be insufficient to store 2, 25,000 tonnes of flour and pulses as per declaration made to the Board of Investment.
The CIC team also talked to local people who showed their total ignorance about the factory and also about the products, it added.
Smile Food Limited did not even submit details of its factory in Value Added Tax (VAT)-7 form as per requirement and showed its head office in Dhaka.
|