The Customs Intelligence and Investigation Directorate (CIID) has detected alleged revenue evasion of Tk 85.21 crore through the misuse of bonded warehouse facilities by a factory in Siddhirganj, Narayanganj, where officials found no effective production operations despite export claims.
During an inspection, officials found production machinery lying unused in heaps and no adequate arrangements for regular manufacturing, raising questions about how the company had produced goods for export.
Acting on a tip-off, a CIID preventive team raided UAGM BD LIMITED at B/240, Mijmiji Dakkhinpara in Siddhirganj on September 9, according to a press release issued on Wednesday.
The company, an indirect exporter under the jurisdiction of the Customs Bond Commissionerate, Dhaka (South), had been importing various raw materials duty-free under bonded warehouse facilities.
The materials included PVC flex, PVC film, PET film, artificial leather, duplex board and colour board. The company reportedly used utilisation permissions (UPs) and back-to-back letters of credit (LCs) to show exports of finished products.
Following the raid, the preventive team analysed import records, production capacity, electricity consumption, utilisation permissions and other relevant documents.
An analysis of the factory’s electricity bills revealed a major discrepancy between its declared production volume and power consumption, according to the press release.
Officials also found no alternative electricity connection, solar power system or gas-powered production facility that could explain the claimed level of manufacturing.
The production machinery was lying unused, while the factory floor lacked adequate space for regular manufacturing operations.
The CIID’s preliminary investigation indicated that the company had allegedly sold duty-free raw materials imported under the bonded facility in the local open market, despite showing exports through back-to-back LCs after obtaining utilisation permissions from the bond commissionerate.
It has finalised a case report alleging revenue evasion of Tk 85,21,46,495 and sent it to the Customs Bond Commissionerate, Dhaka (South), for necessary legal action.
Bonded warehouse facilities allow eligible export-oriented industries to import raw materials without paying customs duties, subject to compliance with applicable conditions.
The misuse of these facilities through the diversion of duty-free materials to the domestic market causes revenue losses and puts businesses complying with the rules at a competitive disadvantage, the CIID said.
It said surveillance and preventive operations will continue to identify irregularities, prevent the misuse of bonded warehouse facilities and protect government revenue.