Importers avail tax waiver using system's loopholes

Govt losing revenue 

The National Board of Revenue (NBR) is losing a significant amount of revenue due to the lack of relevant orders against duty-free code of import items.

All duty-free items have separate Customs Procedure Code (CPC) issued by ASYCUDA world system.

Field level customs officials found that some importers are availing full tax waiver, including Advance Trade VAT (ATV) and Advance Income Tax (AIT) under the code, which are payable for those items.

In Benapole customs house, the largest land port of the country, importers have been getting exemption from ATV and AIT on raw materials of biscuits for years under the CPC.

Beanpole customs commissioner Belal Hossain Chowdhury said last year's claim for revenue arrears would be around Tk 1.0 billion against the import of the items on account of AIT and ATV.

He made a written proposal to the National Board of Revenue (NBR) to address the issue immediately. In the proposal, he said there is a separate Statutory Regulatory Order (SRO) for duty-free products under the CPC.

He proposed each of the SRO on duty-free items must have another separate order from the NBR defining all applicable taxes. In some cases, ASYCUDA world system shows exemption from AIT and ATV for particular items, which is wrong.

In that case, the customs officials collect AIT or ATV through treasury chalan (invoice) from the importers.

To resolve such complexities, the NBR should issue orders defining all payable duty taxes of items under CPCs.

Addressing the issue, the revenue board recently formed a body to review the CPC in the Asycuda world system aiming to check revenue loss.

Officials said the newly-formed committee comprising first secretaries of customs, income tax and VAT and information technology officials of the NBR would match the codes of duty-free items with the existing customs orders.

The committee would thoroughly examine the orders, special orders, circulars and other duty-free benefits in the ASYCUDA world system to verify CPC containing duty-waiver. It would prepare a draft order by updating the CPC list.

The customs policy member will have to submit a report to the NBR on the basis of Terms of Reference of the Committee.

• Courtesy: The Financial Express /Aug 16, 2018