Novoair tried to resort to fraud with intent to evade Tk 19.09 million in tax revenue, reads a report submitted to the High Court by the Customs House in Dhaka.
The private airliner finally apologised to the authorities to secure relief, as it tried to evade the tax receipts by submitting fake code numbers of imported products while releasing them.
Md Shahadat Jamil, deputy commissioner of customs, submitted the report to the HC bench of Justice Muhammad Khurshid Alam Sarkar and Justice Sardar Md Rashed Jahangir.
He placed the report on behalf of the customs commissioner in compliance with the court's order.
Novoair imported aircraft engine from Singapore in 2023.
After arrival of the goods, it submitted two bills of entry on 23 August and on October 10 to the customs for releasing the goods.
Before releasing the goods, the Risk Analysis Investigation and Detection (RAID) unit of the customs house emailed the Gulf Air Limited to provide the copies of invoice, packing list and other documents.
A representative of the Gulf Air Limited provided the consignment information of the goods by email.
Documents suggested that Novoair declared a fraud HS (harmonised system) code of their products to release them by dodging tax revenue.
According to the invoice declaration of Novoair, the consignment duties were ascertained at Tk 4.62 million, while the actual customs duties were of Tk 23.72 million.
Subsequently, the Novoair craved pardon for untrue declaration of submitting fake code numbers of their products.
Later, the airliner claimed full exemption from the payment of VAT and supplementary duty (SD) in releasing their goods under a SRO (statutory regulatory order) issued in 2022.
In the circumstances, the commissioner of the customs house in Dhaka in a letter sought an explanation from the National Board of Revenue (NBR).
In the meantime, Novoair filed a writ petition with the HC challenging the legality of the letter issued by the customs commissioner to the NBR.
Following the writ, the HC bench on October 30 passed an order directing the customs to release the goods by taking bank guarantee for differential amount within three working days.
The HC also directed the NBR chairman to dispose of the letter regarding applicability of the benefit of exemption under the SRO within three working days.
In the explanation, the NBR said the petitioner company must be manufacturer organisation to get full exemption from the payment of VAT and SD.
But Novoair is engaged in flying passengers and transportation. It is not a manufacturer of goods of air services.
So, Novoair is not entitled to get exemption from the payment of VAT and Supplementary Duty in releasing their goods under the SRO.
Md Yousuf Ali, a lawyer for Novoair, did not make any comment regarding the fraud allegation, saying that this was not the main issue of the case.
An SRO issued in 2022 exempted VAT on the importation of capital machinery by any manufacturing industry or any other VAT-compliant importer, he added.
However, the customs authorities illegally imposed VAT on the import of aircraft engines by Novoair, which is a VAT-compliant importer under the SRO, added Mr Ali.
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