Chattogram Customs did not penalise China Road and Bridge Corporation (CRBC) even though it evaded tax while importing construction materials for a government project.
Instead of realising between 200 and 400 percent of the tax dodged as fines, the customs authorities let the leading Chinese firm off the hook by allowing it to pay just the tax it dodged.
During an audit in January, Chattogram Customs found out that CRBC had imported 22,450 tonnes of pretensioned spun high strength concrete (PHC) piles in six consignments in 2019 but paid only Tk 4.72 crore in taxes when it was supposed to pay Tk 21.64 crore.
The consignments were released from Chattogram Port with incorrect harmonised system (HS) code, which is used for boring machines, instead of the correct code for the PHC piles.
According to the law, Chattogram customs should have fined CRBC between Tk 33.84 crore and Tk 67.68 crore.
According to the law, Chattogram customs should have fined CRBC between Tk 33.84 crore and Tk 67.68 crore
The customs authorities in May issued show-cause notices to CRBC and two of the importer’s C&F agents. They suspended the licences of the C&F agents but were yet to take any action against the customs officials involved.
CRBC in a statement to the commissioner of the Chattogram Customs House on June 29 claimed that they had no idea of the forgery until the customs served them a demand notice on June 23.
They said they had paid their C&F agent SF International Tk 28.52 crore for paying the taxes. They held the agent responsible.
Wang Jinwu, business manager of CRBC Dhaka office, told The Daily Star, “We have solved the tax-related issue following the customs rules. We have paid the money according to customs demand.”
Asked if the CRBC has filed any case against its C&F agents for fraudulence, Jinwu said, “We did not file any case against the C&F agent.”
About a customs notice on September 11 for submission of documents related to CRBC’s claim that it had paid its C&F agents Tk 28.52 crore, Jinwu recently said they were preparing them and were expected to send them to the customs authorities in days.
Sources say that the CRBC paid the dodged tax of Tk 16.92 crore only after the customs temporarily blocked its BIN (business identification number), halting all its imports.
Saiful Islam, the proprietor of SF International, in a letter to the customs commissioner on June 29 said he paid one Rahim Tk 66 lakh and Tk one lakh each to an “ARO and to the Audit Investigation and Research” in cash for the release of the six consignments.
He also said he was refunded Tk 8 lakh andrequested the custom commissioner to take necessary steps to recover the remaining Tk 60 lakh.
Saiful did not mention why he paid the huge sum to Rahim but sources hinted that the payment was to a middleman for underhanded dealings with revenue officials.
The Daily Star has a copy of Saiful’s letter but he withdrew his allegation later on through another letter.
“I spoke about bribery in anger. Later, I realised that it was not right and I withdrew it.”
On forgery of documents, he said the customs and the importer would look into the matter.
From documents, The Daily Star learnt that three assistant revenue officers (ARO) and three revenue officers (RO) were assigned to assess the consignments.
Contacted, ARO Amzad Hossain Hazari told The Daily Star, “We were trying to release the goods quickly as they were imported for government projects. As a result, we did not have the opportunity to analyse the documents well.”
Regarding the bribery allegation, he said, “No name was mentioned in the allegations of bribery. There was no financial gain. It was a mistake.”
Mallik Sadril, another ARO, echoed Hazari’s statement.
The Daily Star contacted three other officials concerned over the phone. They refused to make comments. The phone of the sixth was unreachable.
Mohammed Shafi Uddin, additional commissioner of the customs house, told The Daily Star that they did not slap any fine on the importer as the incident occurred “unintentionally”.
“The case was disposed of under section 83 of the Customs Act … ,” he said.
Shafi said, “There were no direct bribery allegations against anyone in this incident. But we have identified those officials involved in mishandling those consignments. The matter of taking departmental action against them is under process.”
However, Golam Kibria, a member (Custom Policy and ICT) of the National Board of Revenue, said the company must pay a fine if it evades revenue due to changes in the HS code.
“There is no chance of ducking the fine with a mistake as an excuse.”
A source said there was no way to have incorrect HS code on imported goods meant for government projects. The NBR prepares what goods will be imported and how much and their HS codes in advance, the source added.
“This was done deliberately,” the source said.
CBRC, one of the four large state-owned companies in China, focuses on global civil engineering and construction projects such as highways, railways, bridges, ports, and tunnels. It is constructing the Bangabandhu Sheikh Mujibur Rahman Tunnel under the Karnaphuli, the third terminal of Shahjalal International Airport and Matarbari Alta Super Critical Power Plant projects.
This Report was originally published on The Daily Star.
