Six N'ganj textile firms face Tk 269cr tax evasion allegations

Six textile companies in Narayanganj have been found to have allegedly evaded customs duties and taxes amounting to Tk 269 crore through the misuse of bonded warehouse facilities, according to preliminary findings by the Customs Intelligence and Investigation Directorate (CIID).

The preliminary assessment put the amount of alleged duty and tax evasion at Tk 269 crore 48 lakh 55 thousand 807 after examining records of yarn, fabrics, chemicals and other raw materials imported duty-free under bond facilities by the six companies.

The National Board of Revenue (NBR) disclosed the findings in a press release issued to the media on Wednesday, November 11.

According to the release, multiple enforcement teams of the CIID conducted simultaneous raids on October 8 at six bonded textile companies in Rupganj, Bandar and Araihazar in Narayanganj, acting on confidential information. The operation was assisted by the Special Response Battalion (SRB).

During the raids, officials compared the actual stocks of yarn, fabrics, chemicals and other raw materials in the companies' warehouses with their stock registers and information recorded in the Customs Bond Management System (CBMS). They found various discrepancies in the records.

The CIID subsequently collected and analysed import-related information from the NBR's Management Information System (MIS), which led to the preliminary identification of substantial duty and tax evasion by the six companies.

According to the company-wise assessment, Sim Fabrics Limited in Rupganj allegedly evaded around Tk 90.77 crore in duties and taxes.

Jahin Knitwears Limited in Bandar was found to have a preliminary discrepancy involving around Tk 64.61 crore, while Sanjana Fabrics Limited in Rupganj faced allegations involving approximately Tk 60.33 crore in unpaid revenue.

The other companies include Bonafide Knitting Mills Limited in Araihazar, with alleged evasion of around Tk 39.50 crore; Jamal Uddin Textiles Private Limited in Bandar, around Tk 9.45 crore; and Mozaffar Hossain Spinning Mills Limited in Rupganj, around Tk 4.83 crore.

Bonded warehouse facilities allow export-oriented industries to import raw materials without paying customs duties and taxes to reduce production costs and improve their competitiveness in international markets.

However, when such imported materials are diverted from authorised production and export activities and sold in the domestic market, the government loses substantial revenue. Such practices also place legitimate businesses that pay applicable duties and taxes on imported raw materials at a competitive disadvantage.

According to the CIID, inspections found significant shortages of yarn and fabrics at some of the companies. In other cases, the actual stock of goods was higher than the quantities recorded in the declared accounts.

The discrepancies indicate possible misuse of bonded warehouse facilities and risks of revenue evasion, the agency said.

During the operation, officials collected relevant documents and information relating to the companies' imports, production, stock levels and use of raw materials.

The collected records are currently being examined and analysed to establish the nature and extent of the alleged irregularities.

The Customs Intelligence and Investigation Directorate said the preliminary amount of Tk 269 crore 48 lakh could change following the final investigation.

After completing the investigation, the authorities will determine the actual amount of revenue evaded and take legal action against the companies concerned in accordance with the prevailing laws.

The directorate also said intelligence surveillance and enforcement operations would continue to prevent the misuse of bonded warehouse facilities, illegal diversion of imported goods and revenue evasion.

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