Businesses in trouble as NBR cancels inactive bond license

Staff Reporter
The entrepreneurs of the country’s industrial sectors are in trouble as the National Board of Revenue (NBR) is cancelling inactive bonded warehouse license known (bond license).
They said that many industrial units are closed or failed to update their licenses due to various problems amid the slowed economic activities caused by Covid-19 pandemic and the ongoing war between Russia and Ukraine.
But the customs authority is cancelling or suspending the license of the units whose annual audit has not been updated for the last 2 to 5 years, they alleged.
As per the NBR data, around 58 per cent out of 7,184 bond licences under the Customs Bond Commissionerate (Dhaka) remain inactive due to several irregularities, according to the NBR.
CBC Dhaka have so far blocked, cancelled or suspended a total of 4,083 business identification numbers of bonded warehouse licence holders for finding their non-compliance with conditions of the licence and other irregularities.
Among the total inactive bonded warehouse licences, 80 per cent are general bonded warehouse licence holders while rest are special, economic zone and deemed bonded warehouse licence holders.
The Chattagram Bond Commissionerate has also cancelled over 100 inactive licenses till July this year.
Under the circumstance, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) sent a letter to the NBR last week requesting not to cancel the licenses randomly.
In the letter, it said, “The customs authority is cancelling the bond licenses of the industrial units whose annual audit has not been updated for the last 2 to 5 years. But, many of the units are closed in Chattagram region due to different problemes amid the current economic recession caused by Covid-19 pandemic and Russia-Ukraine war.”
Urging not to impose penalty at additional rate for expiring the bonding tenure of imported raw materials, the BGMEA said, The firm, willing to carry out the audit activities, should be given sufficient time to approve it.”
It also said, “In some cases, goods are being exported beyond the bonding period due to various complications including delay in receipt of new export orders from the foreign buyers or order cancellation and deferral order during the pandemic.”
“And the foreign exchanges are being repatriated followed by the export. But due to failure of export within the stipulated bonding period, the customs authority is imposing penalty at additional rate,” the BGMEA said.
The authority should be flexible and should stop the collection of fines amid the changing economic reality, the letter added.
An NBR official said, “Businesses of apparel sector and it related backward linkage industries are commonly violating the bonded warehouse licence rules.”
“Manipulation of annual export and import data, harmonised system codes, miss-match of invoices and misuse of bond facilities are the common non-compliance issues,” he added.
“Sometimes, NBR officials found the imported raw materials in the unauthorized warehouse in many places, which is totally contradictory to bonded rules,” the official added.
Bonded Warehousing means the facility provided to export oriented industries for importing inputs/raw materials and packaging materials without paying any duty or taxes.
The NBR provides the benefits to a wide range of industries to encourage export-oriented industrialization and facilitate exports.