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Rs. 4m cotton racket busted

by Bharatha Malawaraarachchi

Customs have busted a four million rupee duty fraud by a BoI approved firm which had released a consignment of cotton to the local market against regulations.

According to BoI sources, a company in the Katunayaka Free Trade Zone had sold 88,000 yards of 100 per cent cotton valued around Rs. 22 million to another BoI firm in the outstations to manufacture garments for export.

"The latter had disposed the total quantity to the Pettah market, depriving the state of duties amounting to Rs 4.3 million," the sources said.

According to regulations, the factory has to pay GST and NSL if it releases raw materials to the local market as they are given duty concessions to import them exclusively for export. The transaction has been made in rupees. According to regulations it should be made in foreign exchange. This has prevented the inflow of foreign exchange to the country.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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