Misusing bond facility
- A&B Outwear and Norm Outfit have sold products imported under bond facility in open market
- Bepza cancelled lease agreements with the two factories in June 2020
- Norm Outfit has illegally removed 2,739 tonnes of fabrics and accessories from its warehouse
- A&B Outwear illegally removed 6,737 tonnes of raw materials from its warehouse
Taking advantage of tax waiver for imports of raw materials under bond facility for the export-oriented readymade garment (RMG) sector, two companies of Chattogram EPZ have dodged Tk222 crore in duties.
The two garment companies — A&B Outwear and Norm Outfit & Accessories Limited — have sold the products in the open market, depriving the government of Tk222.36 crore in revenues.
Both the garment companies are owned by one Nazmul Abedin, a Bangladeshi expatriate living in London.
The Bangladesh Export Processing Zones Authority (Bepza) has already cancelled lease agreements with the two companies as their factories have been shut down and put at auction.
In order to collect the evaded revenues, Customs Bond Commissionerate Chattogram has issued notices to A&B Outwear and Norm Outfits respectively on 22 April and 28 April.
AKM Mahbubur Rahman, commissioner of the Commissionerate, told TBS, "At the request of the Bepza, we have completed the unfinished audit of the two companies from 2016 to 2020. A review of the documents shows that the Norm Outfit has a stockpile of 2,739 tonnes of fabrics and accessories; the company has removed this product illegally from its warehouse. Norm Outfits and Accessories owes Tk78.12 crore to the government in duties."
"A&B Outwear illegally removed 6,737 tonnes of raw materials from its warehouse. The total government duty on this product is Tk143.24 crore," he said, adding that the customs authorities repeatedly asked the owner of the two companies to conduct an audit but he did not respond.
"Subsequently, the audit activities had to be completed taking information of import and export and information from the bank concerned," he added.
Mahbubur Rahman said the two organisations on 2 May replied in black and white to the show cause notices. In the reply, referring to the ongoing writ over the auction issue with the Bepza, they applied for a stay on show cause notices. But this writ has nothing to do with duty evasion. We will take legal action."
According to customs sources, A&B Outwear was registered in 2007 and Norm Outfit in 2012 as fully export-oriented industrial organisations with the Chattogram Custom Bond Commissionerate.
The two companies were closed down in March 2020. On 7 June of the same year, Bepza cancelled their lease agreement. The auction was completed on November 23, 2020. At the auction, the price of the two companies rose to Tk25 crore.
A&B Outwear tops the list of investors of Chattogram Bepza. Denmark is shown as the investing country. Norm outfit is 101st on that list. Bangladesh is mentioned as an investing country.
Even after repeated attempts, no response was received dialing at T&T contact numbers of the two factories.
However, on condition of anonymity, a former official of the commercial section of A&B Outerwear said that about 1,500 officers and workers served at the two companies – 1,000 in A&B outerwear and 500 in Norm Outfits.
The owner of the company has not paid the employees' salary of around Tk2.5 crore for the month of February 2020. The workers started a movement at that time. At present, the owner of the two companies, Nazmul Abedin, is not in the country. He is currently staying in London.
It is learned that Nazmul is the son of the late Mostafa Anwar of Sylhet. In Chattogram EPZ, Nazmul has another company called Cold Play. It has also been closed since March last year. About 300 workers worked there.