Value differs, so does tariff | The Daily Star
12:00 AM, April 21, 2021 / LAST MODIFIED: 12:50 AM, April 21, 2021


Value differs, so does tariff

Govt loses revenue

It is a 1,496 cubic centimetres (cc) car. If you import two of the identical sport utility vehicles – one through Chattogram port and another through Mongla Port -- you are likely to see a gap in the assessment of the import value of the vehicles by customs in the two ports.

If you are lucky, you may find less tariff payable for importing the car through Mongla Port than importing the same from Chattogram.

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This is what is happening over the years in the case of the import of SUVs.

And the discrepancy in duty assessment between the customs offices at the two seaports has widened in recent months -- a development that raises risks of revenue losses for the revenue-deficient country, which suffers from a meagre tax-GDP ratio. 

Take the example of the 1,496cc Honda CR-B model SUV. Customs officials at the Chattogram Customs House assessed its value at $21,144, or Tk 18 lakh. And the government raked in Tk 36 lakh as revenue from the imported vehicle.

While Customs officials at Mongla assessed the price of the same car at $16,435, or Tk 14 lakh. The assessment brought Tk 28 lakh for the state coffer, which was 22 per cent less than the tariff calculated by the Chattogram Customs although the car was imported from the same country.

Customs documents showed Sal Sabeel Cars, an importer, brought in six branded Honda CR-B (CC-1496) model cars in December 2020. The value was assessed at $21,144 at the Chattogram Port.

The company raised questions after finding out that the assessed value was far higher than in Mongla port.

Rabiul Karim, managing director of Sal Sabeel Cars, said, "The law should be equal for all. An unequal competition has been created in the market as two custom stations assess the value differently. I hope this issue will be resolved soon."

The importer and the custom commissioners concerned wrote several times to the National Board of Revenue (NBR) to address the issue. It is yet to come up with a solution.

Apart from private cars, most new vehicles, including pickups, microbuses, and minibuses, have faced different assessments at the two major seaports in the last two years.

In Bangladesh, most of the imported goods are assessed based on the import or invoice value, but it is not followed in the case of car imports.

For reconditioned cars, the tariff is considered as per yellow book price -- the international yardstick for car prices -- for duty assessment.

Customs officials say 85 per cent to 90 per cent of the total cars used to be imported through the Chattogram port. But the volume is decreasing as bringing in vehicles through the largest seaport in the country costs more.

The imports of cars have increased through Mongla port.

According to the NBR, 3,265 private cars were imported through Chattogram port as of February of the fiscal year 2020-21, down 35 per cent from 5,014 vehicles a year ago.

During the same period, 7,258 vehicles entered the country through Mongla port, up 6 per cent year-on-year.

The Chattogram Customs House has written to the NBR that the government was being deprived of revenue for assessing the price of the cars differently.

In a letter to the NBR on October 11 last year, the Chattogram Customs House Commissioner said there was no complication in setting customs duty on imported reconditioned cars as the tariff was fixed.

It requested the NBR to fix the tariff rate for the new vehicle.

At both Mongla and Chattogram stations, cars are being assessed at higher prices compared to the import value declared by importers.

According to the letter, the branded Honda car was shown to have an import price of about $15,000. However, the deduction value (market price estimates) of the Customs Valuation Rules-2000 shows that the value of the vehicle should be at least $21,144.

Chattogram Customs House Commissioner Fakrul Alam said: "We have fixed a customs duty by deducting market sales price, and we are following this value during the assessment."

A trader can make a profit of Tk 8 lakh to Tk 10 lakh at the import stage because of the different assessment, he said.

Mongla Customs House Commissioner Hossain Ahmed said no goods should be assessed differently at two customs stations.

However, due to the differences in product quantity and exporters, the same car is imported at different prices. As a result, it becomes difficult to apply the same assessment rate, he said.

"We are trying to get accurate information from various sources. We have sent letters to the NBR seeking opinions. If the NBR addresses the issue, complications will be removed."

Golam Kibria, member of the NBR for customs policy and ICT, said a wing of the NBR had already been given the responsibility to resolve it.

The wing has collected information from the two customs stations, reliable companies, exporters and the embassies of Bangladesh in the exporting countries.

"Based on the information and opinions, the NBR will give a decision in this regard very soon," Kibria said.      


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