Tk 400cr tax evaded in importing posh cars

About half the luxury cars Bangladeshi Britons brought into the country for tax-free use of up to a year were never shipped back and their taxes were not paid.

The 119 posh cars, some of them Mercedes, BMWs and Jaguars, are now being used in the country dodging tax of over Tk 400 crore.

Using the UN Customs Convention on the Temporary Importation of Private Road Vehicles, 369 luxury cars were brought to Chittagong port between 2007 and 2012.

The National Board of Revenue (NBR) cancelled the provision in 2013 following its widespread abuse. But by then, 249 of these vehicles had been released from the port and the remaining 120 after years of being inside shipping containers were auctioned off on May 30 this year.

Photo: Collected

Of the 249 that were released, 129 were shipped back to their country of origin after a year, the longest time a vehicle could be used under the facility also known as carnet. If the owners still wanted to use those cars here, they would have had to pay between 150 and 833 percent of the cars value in tax.

Tax for only one of the remaining 120 cars were paid. The owners with the 119 cars disappeared.

THE 119 CARS

As per the documents at the Customs Intelligence and Investigation Directorate (CIID), the directorate had been able to seize only 12 of these luxury cars.

Claiming that about 20 of these cars had been recovered, Director General of CIID Shahidul Islam said those who brought the cars under carnet facility could not be held as they returned to their countries selling their cars. These cars have changed hands several times.

The Daily Star obtained a detailed list of the people who brought these cars. All of them were from England with addresses in London, Farnborough, Sussex, and Buckingham and The Royal Automobile Club, London, was the agent that issued the carnet.

The owners' addresses here and their passport information are all there on the list.

Local addresses of 85 cars was in Sylhet, nine Chittagong, six in Dhaka.

The Daily Star randomly visited 13 addresses in Sylhet and the nine in Chittagong only to find that nobody by that name lived there.

The addresses were apparently fake and the customs authorities failed to verify those before releasing the vehicles to their owners.

Photo: Collected

Asked why they could not detain the people involved despite having addresses at home and abroad, the CIID director general said most of the addresses at home were fake. As they are Bangladeshi by birth but a foreign national there is legal complexity. 

He said his department would consider sending their passport numbers to the immigrations department so that actions can be taken if any of them returned to Bangladesh.

Interestingly, Bangladesh is not a signatory to the UN Customs Convention on the Temporary Importation of Private Road Vehicles of 1954. Yet, the facility was provided to individuals.

NBR officials said Bangladesh was not bound to provide this facility.

Moinul Khan, director general of customs intelligence and investigation, who is now working at the customs evaluation and internal audit commissionerate, said the customs had approved the import of cars even though Bangladesh never signed the UN treaty. Many owners of the cars sold the vehicles here and took the money abroad, which is money laundering.

He said a lot of those cars are still hidden in the country.

Sources in Chittagong customs, CIID, and the Chittagong port said oversight of such magnitude by the authorities was very unlikely unless there had been some underhand dealings.  

They claimed that it was unlikely to be a case of sheer incompetence of the authorities concerned.

THE AUCTION

Chittagong Customs Authority prepared a catalogue of 111 out of 120 cares that got stuck in the port after the NBR cancelled carnet in 2013.

Bids for the cars were made on May 30 and the results are likely to be published this week.

Customs authorities earlier failed to sell many of these cars even though they had arranged auctions twice. They had to cancel the auctions as the representatives of an organisations concerned were not present in the tender committee meeting.

The customs authorities auctioned 85 cars on August 30, 2016, and 113 cars on May 24, 2017.

BMWs, Mercedes, Mitsubishis, Lexus, Land Rovers, Jaguars, Toyotas, Fords, Hondas, Volkswagens and Jeeps were among the vehicles.

In the first auction, the bids were between Tk 3 lakh and Tk one crore.

The bidders showed interest in 93 out of the 113 cars in the second auction and the bids were between Tk 3 lakh and Tk 1.13 crore. 

The customs authorities could not sell the cars in the second auction citing the same reason as the first.

As per the rules of auctioning of cars, if a bid is more than 60 percent of the reserved value (including duty) of the car, it could be sold. Otherwise, a second auction is required.

In the second round, there is no reserved value and a car could be sold if the bid is more than that of the first auction.

In the third auction, these rules are not applicable and the highest bidder takes the car.

Customs and port insiders said most of the individuals who bid did so in all three auctions and they used different organisation and company names. In some cases, one individual made bids using different company and organisation names.

[Our correspondent Dwoha Chowdhury in Sylhet contributed to this report.]