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Eat up Tk 173m cash incentive
Twenty apparel units abuse bond facility
Shakhawat Hossain
3/13/2006
The National Board of Revenue (NBR) has identified 20 export-oriented apparel units which have availed themselves of government cash incentive worth about Tk 173 million, allegedly, abusing bond facilities.
The NBR took actions in the past against abuse of bond facilities by many readymade garments (RMG) and knitwear units. But it is for the first time the Board has been probing the matter thoroughly, said a high Board official.
These apparel units took the cash incentives using the Foreign Exchange Circular no. 9 that was enforced in March 2001. Sources alleged that the RMG and knit units in question were not entitled to the facility offered under the circular.
The NBR through a probe became certain that the owners of 20 apparel units had committed the white collar crime in collusion with some unscrupulous bank officials. The bank officials also received a part of the incentive money.
Out of 20 units, 18 got the cash incentive from the EXIM Bank while the two others from the Social Investment Bank Ltd, a Board probe report said.
The government allows 5.0 per cent cash incentives to the cent per cent export-oriented RMG and knit factories.
The NBR has decided to continue such probe into other garments and banks.
It is suspected that the government might be losing around Tk 1.0 billion due to the abuse of bond facilities in the current fiscal.
Shamsul Alamin Fabrics Ltd took away the highest amount of cash incentive amounting to Tk 66.45 million followed by Masco Industries Ltd Tk 24.41 million, Flamingo Fashions Ltd Tk 12.67 million and Fariha Apparels Ltd Tk 10 million.
Other RMG factories that received cash incentives between Tk 61,749 and Tk 93,27,166 include, EEC Bangladesh Knitwear, FM Knitwear, N&Z Knitting Industries, Ashi Knit Apparels, Angel Corporation Knitting Ind., Sydney Fashion Ltd, Sharp Knitting & Dying, Ehsan Sweater, AKH Knitting & Dying, C & A Textile Ltd and Anupam Hosiery.
The NBR might withdraw the bond facility of these units. The Board had cancelled and suspended more than 300 bond licences in the first 11 months of 2004-05. A total of 1,274 bond licences have either been cancelled or suspended since 2000 for the fraudulent practices by the RMG and knit units concerned.
Businessmen, however, said Customs officials are also involved in the irregularities that cost the government an estimated revenue of Tk 2.0 billion each year.
Many businessmen are abusing the bonded warehouse facilities by selling the imported duty-free raw materials and finished goods in the local market. Also, the dishonest businessmen do not maintain proper statistics of their export and import activities with the objective of abusing the facilities, sources said.
Around 90 percent of the bonded facility abuses are committed by the export-oriented apparel units and the rest by the backward linkage industries.
The government had set up a commissionerate to issue licences and monitor bonded warehouse facility in 2000.
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