Customs Bond Commissionerate has recommended that the National Board of Revenue give no bond licence to new factories established in the Dhaka city corporations’ areas which are declared residential and commercial parts.
CBC Dhaka, the largest bond office of the NBR, has also sought restriction on issuing bond licence to factories with 100 per cent ownership of foreign nationals to prevent misuse of duty-free import facility under bond licence.
It recommended that the NBR put a condition of having 51 per cent ownership by local businesses for enjoying duty-free benefit on import of raw materials under bond licence.
CBC Dhaka commissioner Md Al Amin Pramanik on July 5 wrote a letter to the NBR seeking directives over issuing new bond licence in some specific situations.
It also sought an amendment of the Bonded Warehouse Licensing Rules-2008 to implement the proposals.
The NBR issues bonded warehouse licence, commonly known as bond licence, mainly to 100 per cent export-oriented industries offering duty-free raw materials import benefits with some conditions.
The conditions include that manufacturers must export the finished goods produced using the raw materials and in no way they should sell the raw materials in the local market.
In the letter, the CBC commissioner said that they were getting applications for bond licences for industries located in the areas which are declared residential or commercial areas of the Dhaka city corporations.
Applicants provide copy of trade licences and clearance certificates from agencies concerned with their applications, he said.
‘But, CBC thinks that bond licence should not be issued to the factories situated in the areas,’ the letter stated.
CBC officials said that the Companies Act-1994 allowed formation of companies with 100 per cent foreign investment.
The Industrial Policy-2010 also allows foreign investment in readymade garment and garment accessories sector.
CBC has to consider the applications from foreign nationals for issuing bond licence if they have work permits and certificates issued by the investment promotion authority, they said.
But in many cases, these foreign investors don’t have any work permit as they are registered only as investors and stay very short period of time in the country, a senior customs official said.
‘So, there are risks of misuse of bond facility and duty evasion,’ he said.
He said that CBC authorities would not be able to bring these foreigners to book in case of duty evasion while their local employees could not be held responsible.
Local dishonest businesses may also misuse the bond benefit taking the licence showing the foreigners, he added.
In this context, CBC recommended attaching the condition of 51 per cent local ownership in the companies having foreign investment outside of export processing zones for duty-free facility on import of raw materials.
It will secure the government revenue as CBC will be able to realise the revenue, in case of any misuse of bonded warehouse facility, from the local partners, said the letter.
It also proposed inclusion of a condition of giving undertakings with wealth statements stating that they (foreign investors) would pay all the dues if the amount of evaded duties and taxes exceeded the value of tangible and intangible assets of the company.
The bond office made the recommendation observing that many investors were applying for bond licences for factories set up in rented buildings.
Till now, some 6,000 export-oriented manufacturers obtained bond licence from the CBC Dhaka.
Of which, around 4,000 bond licences currently remain active.
There is another bond commissionerate in Chittagong under which the number of bond licensees is 1,368.
Source: New Age.