A lack of proper weighing equipment at the Chattogram port has apparently created a scope for used gasoline engine importers to evade taxes for the last couple of years through the concealment of as much as two-thirds of the weight of products in declarations.

Currently, several imports including gasoline engines, hot rolled and H section steel, GP sheet and scrap have to be weighed on trucks using vehicle scales at the port gate, said customs officials.

Only suspicious consignments are weighed in this way as doing so for all goods would lead to a backlog for the sheer volume being dealt with every day. This creates a scope for importers to hide actual weights and evade paying taxes.

The audit, investigation and research department, a special wing of the Customs House, Chattogram, recently raised the alarm on 12 consignments. With physical inspections were due to take place, two importers willingly came forward and applied for increasing the weight of their four consignments from 85 tonnes to 222 tonnes.

According to customs documents, Chattogram-based Shah Amanat Motor Engineering and Service Center imported 193 tonnes of second-hand gasoline engines through three consignments from the United Arab Emirates but declared it to be only 78 tonnes.

The importer paid around Tk 13 lakh in taxes dodged and Tk 28.5 lakh in penalties.

Similarly, MK Motor Workshop imported 25 tonnes of used gasoline engines from Japan but declared it to be only 7 tonnes. Customs collected around Tk 3.5 lakh as tax dodged and Tk 7.80 lakh as a penalty.

Customs officials said the importers willingly increased the weight apprehending that they would have to pay a higher amount as a penalty if inspections were carried out under a new rule.

On July 20 this year, the National Board of Revenue (NBR) ended a five-decade-old system of nominal penalties by setting the minimum fine for under-invoicing to be at least double the current amount.

The penalty for dodging taxes could be as high as four times the amount owed, depending on the extent of the irregularities.

As a result, the total number of false declarations dropped soon after the amendment came into effect at the beginning of August, officials said.

Customs sources said in the case of such irregularities, unscrupulous importers could get away paying a nominal fine as there was no provision stipulating a minimum penalty in the Customs Act, 1969.

Before the implementation of this law, fines were levied at a rate of 20 to 30 per cent of the price of the goods on an average in the customs house.

Rezaul Karim, the assistant commissioner of the Customs House, told The Daily Star that the importers had been concealing weights for a long time for the absence of proper scales.

However, after receiving complaints recently, customs clamped down on such activities.

"Usually first we lock [halt all activities centring] a consignment after getting information…then we conduct 100 per cent physical examination to find out irregularities," he said. 

"In this case, the importers willingly admitted the irregularities before physical examination due to fear of facing higher fines under the new law," he added.

Karim said since they willingly admitted their wrongdoing, the fine was set at 200 to 250 per cent of the tax evaded. Otherwise, it would have gone up as high as 300 per cent as per the law.

"With increased surveillance, there has been a stop to the arrival of such consignments at Chattogram port for the last two weeks," he said.

"We have heard that they are importing through the Mongla and Pangaon port to continue the irregularities," he said, adding that letters were being sent to the NBR to increase surveillance at those customs stations as well.

Md Tofayel Ahmed, joint commissioner (jetty) of the customs house, said they are following some terms and orders while releasing such heavyweight goods from the port's jetty.

"Since there are allegations of irregularities in the consignments of such products, we randomly check some consignments and try to verify documents of all consignments from different sources before releasing the goods," he said.

Such activities are being conducted regularly, he added.

Clearing and forwarding agent Arifin Imperial Trading was responsible for the release of the four consignments on behalf of the importers.

Its proprietor, M Zakir, told The Daily Star that it was a mistake which was later corrected.