The VAT authority has found some 36 textile mills in Narsingdi under Dhaka division misused concessionary duty benefit for importing capital machinery.
The East Zone of the Customs, Excise and VAT Commissionerate, Dhaka detected irregularities during a sudden raid on the mills on the basis of secret information.
It has found that the textile mills have imported some 30,353 automatic power loom machines during the last five years under the capital machinery benefit, paying a reduced duty of 1.0 per cent, but the authorities did not install most of the machines in the factories for production of textiles.
Talking to the FE on Tuesday, Tasmina Hossain, commissioner of the East VAT zone, said around Tk 2.0 billion duty and taxes are involved with irregularities by those textile mills.
"We have hold meetings with the textile mills owners and they acknowledged that they have sold the machinery in the local market violating the concessionary duty benefit for capital machinery," she said.
They have also evaded trade VAT at a rate of 5.0 per cent by selling the machinery escaping the eyes of the VAT officials, she added.
During the raid, the VAT authority also found evidence that the textile mills imported some other taxable products with the capital machinery.
The VAT officials have detected evasion of Tk 390 million VAT initially through irregularities.
The East zone has also requested the Chittagong Customs House to strengthen surveillance and take punitive action against the persons involved with irregularities.
Of the textile mills, Johra Textile imported some 128 machines, Ovi Tie dye and Swing House 1,086 machines, RK Textile 2150 machines, Moon Tex 2,365 machines but none was installed in their factories.
Aida Textile imported 332 machines but installed 48 in their factories for production purpose. Al-Amin Textile imported 288 machines but installed 82.
Amin Mir Textile imported 630 machines and installed 100, Adar Textile imported 60 machines and installed 40 machines.
Karim Textile installed 56 machines out of imported 250, followed by Fahad Textile 48 out of 204, Agomoni Textile 40 out of 220, SB Textile 104 out of 310, Bunon Textile 80 out of 420, Moni Textile 4 out of 384, Nijhum Textile 136 out of 1,288, Umaija Textile 142 out of 372, Modern Textile 70 out of 322, Shilpi Textile 36 out of 120, Sultana Textile 128 out of 674, MR Textile 45 out of 72, HR Textile 80 out of 180, Harun Textile 110 out of 200, Mother Textile 140 out of 376, Rangdhanu Textile 24 out of 370 and Huq Textile 104 out of 380.
Madina Textile has imported 3,144 automatic power loom machines but installed only 78 machines.
Zarif Textile, Haji Sizing Mill, Momin Textile and Yamin Spinning imported 1,173, 1,114, 3,950 and 1,520 machines and installed only 28, 200, 243, 286 machines respectively.
Yamin Sizing, Sneha Moni Textile and Sarkar Textile installed 540, 1,600 and 213 machines out of imported 704, 2,440 and 2,812 machines respectively.
Mansoor Ahmed, secretary of Bangladesh Textile Mills Association (BTMA), said they will extend all-out cooperation to bring the owners of the factories to book.
He said it's a violation of law as they sold the machines in the local market after importing them at a concessionary rate of customs duty instead of installing them in the factories.
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