These companies allegedly import products to use as raw materials for finished goods but they sell the products to the local market in connivance with the EPZ authority.

When contacted, NBR Chairman AFM Solaiman Chowdhury said, "Such an allegation is not a new phenomenon, and so far I know the National Board of Revenue is planning different initiatives to check the menace."

The NBR is mulling to prepare a list of such dubious industries in all the EPZs in the country to keep a close vigilance on them, he added.

Admitting the malpractice, Farid Uddin Ahmed, commissioner, Chittagong Customs House, said they sued eight factories in this connection.

He held a section of corrupt CEPZ officials responsible for colluding with the entrepreneurs in committing the smuggling.

"No industry officials or owners can import any raw material without obtaining order from the EPZ authority. If the officers concerned of the EPZ do not have a nexus with the ill-doer companies, it is impossible to smuggle out the products to the local market," Farid Uddin told The Daily Star over telephone.

He further said these dubious companies would be brought under severe vigilance to stop the malpractice.

The customs authority has also fined some factories after finding them guilty, he also informed.

Sources in the NBR said the industries located at EPZ enjoys exemption of import duty, value added tax and supplementary duty imposed on imported goods only for processing and export in accordance with section 10 of the Bangladesh Export Processing Zones Authority Act and section 19 of the Customs Act, 1969.

The capital machinery and spares, instruments, apparatus and appliances including testing and quality control equipment and parts thereof, imported for installation in an export processing zone, are also allowed duty-free facility under section 10 of the BEPZA Act.

NBR officials alleged that the manufacturing companies in the EPZs avail of this facility and sell the duty-free products in the local market evading a huge amount of revenue as well as posing an uneven competition to the legal importers who pay 7.5 percent to 25 percent duty and supplementary duty for the same products.

The CEPZ has a total of 246 industries in operation..

The CEPZ companies produce mainly toys, cycle, zipper, electronic goods, plywood, software, audio- video tapes, fan motor, printed jute bag and rope, plastic bag, carton box and hanger.

The CEPZ with 428 industrial plots is located on 453 acres of land.

The BEPZA sources said enterprises in the EPZs exported goods worth around $1,800 million in FY 2005-06.

During the period, the EPZ units also employed around 21,700 people.

In FY 2004-05, the enterprises in EPZs exported goods worth $1,548.68 million.

The eight EPZs in the country also contributed nearly 17.90 per cent to the total export earning in FY 2005-06.