NBR to verify exporters' use of raw materials online to curb fraud

The National Board of Revenue (NBR) has introduced an online, real-time system to verify exporters' use of duty-free imported raw materials, effectively ending the long-standing manual verification process.

Under the new system, the NBR's ASYCUDA World software will be digitally connected with the Bangladesh Garment Manufacturers and Exporters Association's (BGMEA) online Utility Declaration (e-UD) platform.

Through this integration, customs authorities will be able to verify exporters' raw material usage online, significantly reducing opportunities for fraud, NBR officials said.

The connectivity between ASYCUDA World and the BGMEA e-UD platform was established today (11 January), according to an NBR press release. As a result, the Utility Declaration verification process will now be fully online and conducted on a real-time basis.

The NBR said the initiative would substantially reduce risks to revenue protection, improve customs bond management, and make import-export clearance procedures faster and more efficient.

A senior NBR official, speaking to The Business Standard on condition of anonymity, said irregularities often occurred in the issuance of e-UD certificates by associations, particularly regarding the declared use of imported raw materials.

"Such irregularities were difficult to detect under the manual system," the official said.

"With the new system, export data and information on raw material usage will be easily accessible even after 10 years," the official added.

"If an exporter shows fake exports or diverts duty-free raw materials to the local market through any means, it will be detected easily. As a result, they will not be able to continue importing raw materials under duty-free facilities at will."

The government allows exporters to import raw materials duty-free on the condition that they are used entirely for export-oriented production.

However, there have long been allegations that some exporters violate these conditions by selling such raw materials in the domestic market.

These practices not only cause significant revenue losses for the government but also create unfair competition for local producers and traders who import similar products after paying applicable duties.

Local textile mills have been among the worst affected. Mill owners claim that duty-free raw materials sold in the open market and goods entering the country through smuggling result in the influx of yarn, fabric and other apparel products worth nearly $5 billion annually, undermining the domestic textile industry.