IN the last five years, 36 textile mills owners have only setup 5000 machines in their factories against their imported 30,353 units and the rest of the imported machines were sold in the open market. These machines were imported on the duty-free facilities. As a result, the government has been deprived of Tk 39 crore VAT.
Recently, Dhaka East VAT Commissioner in a surprise operation visited in the factories in Narsingdi and found evidence of this fancy forgery. Although these mills imported 30,353 automatic power loom machines mentioned in the capital equipment notification in the last five financial years, most of them were sold in the local market without being installed in factories. Bangladesh Textile Mill Association said if such allegations found against any member organization, action will be taken.
As per conditions of the statutory regulatory order of the NBR, machinery imported under the duty benefit should be used only for production purposes and strictly prohibits sale and transfer to other entities. In many cases, the VAT officials found that the mill’s owners imported products for which customs duty at a higher rate was applicable under the special arrangement offered to manufacturers.
There are different custom duty rates on the import of capital machinery ranging from 1.0 per cent to 25 per cent. Some of the manufacturing industries depending on their nature of products and areas enjoy reduced or concessionary rates. Capital machinery for the power and energy sector, agriculture, local motorcycles, refrigerators, air conditioners, etc is enjoying concessionary rates.
If the tax and VAT wings cannot collect the advance tax from the importers, the government will be deprived of its due amount of revenue. The government should be strict to stop VAT and tax evasion in the name of machinery import. Customs House should enhance monitoring to prevent such malpractice in the import of machinery and take legal steps against violation of the customs act.
