NBR report spills the beans about pvt ICDs

Jasim Uddin Haroon The NBR has raised serious questions about the operations of the 18 private Inland Container Depots (ICDs) after its probe has revealed that the depots are being used by traders to export and import banned products. The ICDs, which handled some 65 per cent of Bangladesh's $55 billion foreign trade last year, have become outlets for miss-declaring shipments in an effort to evade taxes worth billions of taka. A report of the Chittagong Customs House (CCH) made the findings last month, highlighting the importance of close surveillance of the ICDs, which were set up by some of the major industrial groups of the country. A copy of the CCH report signed by Syed Kibria has been obtained by the FE. The report, the first such study by the customs department, has been commissioned by the National Board of Revenue. ICD owners reacted sharply to the report, saying it aimed at smearing their good reputation and hampering growth. They questioned the report's timing, noting it came at a time when almost every ICD was planning expansion. In the brief two-page summary of the report, CCH said the incidences of miss-declaration of import and export goods -- well orchestrated ploys to evade taxes -- at the ICDs are high and ave been soaring for some time. It said the NBR, as the licensing authority of the ICDs, should refrain from permitting the depots to handle more import goods as it could deteriorate the miss-declaration situation or allow entry or exit of contraband items. While commissioning the report, the NBR sought to know whether it should allow the ICDs to handle more import items. The depots, which are based in Chittagong, have been handling 17 major import items since 2007. It said the locations of the ICDs are scattered -- some situated 30 kilometres away off the Chittagong Port -- and inspections and close monitoring of the depots by customs officials are "very difficult". The report listed at least five incidences of miss-declaration in recent months in four leading private depots: KDS Logistics, Golden Depot, Essack Brothers and K & T Logistics. A trader tried to export rice through KDS Logistics this year under the guise of food stuffs although the government has banned the overseas sale of the staple since 2009 in a bid to rein in prices in the domestic market. When contacted, KDS chairman Khalilur Rahman pleaded his firm's innocence, blaming the trader and customs officials instead for the crime. He said KDS has since boosted up security and inspection at the depot. According to the report, another importer wanted to take delivery of photocopiers worth Tk700 million from KDS Logistics falsifying the machines real prices. Customs authorities detected the crime and fined the trader Tk 50 million. The report also said an exporter wanted to make shipment of 100 tonnes of rice through another leading ICD, Golden Depot. Another exporter tried to evade duties at Essack Brothers, the largest ICD in Chittagong. Qayum Khan, president of Bangladesh Inland Container Depots Association (BICDA), defended the depots, calling the CCH report "motivated" and "one-dimensional". "We're not involved in these crimes. Exporters and importers are responsible for the irregularities. The incidences reported in our ICDs are a fraction of similar occurrences in the Chittagong port," said Khan. Mr Qayum also managing director of QNS, a private ICD, said the depot owners would hold a meeting with the Finance Minister in the wake of the report. "We'll tell him that the NBR report has serious flaws and it's biased."