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Bangladesh Trade and Tariff Commission (BTTC) has recommended the home ministry and the National Board of Revenue (NBR) take special action against the smuggling of foreign clothes and fabrics, including the evasion of taxes on their imports, into the country to help protect the local industry.
It has also recommended the customs authorities conduct physical examinations of imported goods and fabrics to curb false declarations.
Besides, it recommended collecting taxes on imported fabrics and clothing as per the existing regulation.
The commission submitted a set of recommendations, including the aforementioned ones, to the home ministry and NBR ahead of Eid-ul-fitr.
Officials of the ministry and NBR told The Financial Express they have received the recommendations and are working on those.
The recommendations were signed by Md Mahmodul Hasan, deputy chief of BTTC's Trade Policy Division.
On the occasion of Eid, the Bangladesh Jamdani Manufacturers and Exporters Association recently requested BTTC to take measures to protect the market for local clothes, including Jamdani, Banarasi, Tangail saree, silk, Manipuri saree, lehenga, and others.
BTTC then reviewed the country's demand for clothes, import volume and duties, and import facilities. Bangladesh's annual demand for clothes is around 8.0 billion metres. A small portion of the demand is met by local handloom and power loom. There are more than 0.3 million weavers across the country.
A huge volume of foreign clothing and fabrics is smuggled into Bangladesh, which is hurting the local industries, BTTC said.
Traders generally import clothes from India, Pakistan, China, Japan, Myanmar, Hong Kong, Vietnam, and Thailand.
Two- and three-piece sets and lehengas are mainly imported from neighbouring India. Their import volume has increased, but an analysis of the average prices of these items shows the amount is less than import prices, BTTC noted. It found that some sarees and lehengas are selling for more than Tk 0.1 million in the local market.
Moreover, it found that the supply of various clothes, including two- and three-piece sets as well as sarees, is higher in the market than the import volume of such items, which indicates tax evasion and smuggling.
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