Bond facility misused to import excess goods, dodge duty

Misusing facilities given for help:

• 51 companies misused their bond facilities during July 2020-January 2021
• Dhaka-based T&A Associates imported 20,875kg woven fabric from China although its bond licence permits 20,118kg
• Evidence of misusing bond facility was found against Hypoid Composite Knit, Dekko Accessories, Asia Interlinings, Knitex Dresses, Nice Cotton, Eurotex Knitwear, and Al-Muslim Washing
• Chattogram Custom House has fined these companies over Tk3.29 crore

Some importers are violating their bond licence terms by bringing in goods through false declarations and importing more goods than is allowed in the licence, the Chattogram Customs has detected.

The Dhaka-based T&A Associates, which has a bond licence for accessories, imported 20,875 kilograms of woven narrow fabric from China under the bonded warehouse facility violating its permissible limit, which is 20,118kg as per the licence.

The Chattogram Customs detected the irregularity and fined the importer Tk31.50 lakh on 11 January for importing excess goods and declaring a false Harmonised System (HS) code.

A number of companies like T&A Associates have been involved in such irregularities for quite some time, depriving the government of a large amount of revenue.

Also, there are allegations that these imported raw materials are sold on the open market instead of supplied to ready-made garment industries.

Mohammad Fakhrul Alam, commissioner at the Chattogram Custom House, told The Business Standard that some companies were importing more goods than permitted in their bond licences while there are some organisations that are also using different HS codes by mistake.

He said the authorities are active in stopping this malpractice and punitive actions like fines are enforced on these firms.

However, importers claimed otherwise.

Khandaker Latifur Rahman Azim, first vice-president of the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association, claimed that there is no way products more than the permissible limit can be imported under the bonded facility.

The HS codes change every year, and so, the customs authorities penalise importers for using old codes, he said.

He, however, admitted that some unscrupulous businessmen might sell imported products on the open market.

Azim said the Chattogram Customs had a meeting with the association's leaders recently.

The meeting decided that if any HS codes are found defunct, imported goods can be released after paying the full duty and after submitting a consignment pledge that within 30 days a correct HS code will be obtained from the Bond Commissionerate concerned and be included in the Custom House to complete the entire procedure relating to goods release.

The Customs Bond Commissionerate issues bond licences for various sectors to facilitate 100% export-oriented garment industry.

When contacted, T&A Associates' proprietor Md Khorshed Alam said the HS code mentioned in the licence issued by the Dhaka Customs Bond Commissionerate is mentioned on the paper required to offload goods and can be amended later.

On importing more products than what is stated in the licence, he said the weight of paper packets often increases due to weather changes.

According to the Chattogram Custom House, from 1 July 2020 to 31 January 2021, there was evidence that 51 companies misused their bond facilities by providing false HS codes, importing excess goods and bringing in goods from abroad without declaration.

The Custom House fined the companies over Tk3.29 crore.

Hypoid Composite Knit Ltd was fined Tk81 lakh, Dekko Accessories Ltd over Tk30 lakh, Asia Interlinings Limited Tk45 lakh, Knitex Dresses Ltd Tk82 lakh, Nice Cotton Ltd Tk14 lakh, Eurotex Knitwear Ltd Tk10 lakh, and Al-Muslim Washing Ltd Tk12 lakh.