Probe detects massive deceit in import of refrigerators
Wednesday, 24 November 2010
Doulot Akter Mala
An in-depth investigation has found massive under-invoicing and false declaration in import of refrigerators causing a substantial amount of revenue loss to the national exchequer.
The investigation launched by Bangladesh Tariff Commission (BTC) has found most of the imported refrigerators 'without a country of origin', although importers claim they have imported those from China.
A three-member investigation team formed by BTC has conducted the investigation in September last at the Chittagong customs house and the port under the instruction of higher authorities.
The team has recently submitted the investigation report to the National Board of Revenue (NBR) for taking necessary action.
BTC is empowered to recommend slapping anti-dumping, countervailing or safeguard duties if it finds any local industry facing uneven competition with imported goods.
BTC chairman Mozibur Rahman said: "We are planning to impose anti-dumping duty after a final scrutiny on under-invoicing. The BTC will have to collect further documents to defend its stand."
The BTC team has conducted the primary investigation and got confirmed about under-invoicing in import of refrigerators, he said.
"We will go to China and Indonesia to collect more information. The decision might be taken by next month on slapping duty to protect the local industry," he said.
The team has discussed with the commissioners, deputy commissioners and Chittagong port Authority (CPA) officials to know about the actual scenario of the imported refrigerators.
"Chittagong customs house commissioners have blamed faulty valuation assessment system for the massive under-invoicing of the goods," the investigation report said.
The customs department used to check 10 per cent of the imported products through clean report of finding (CRF) when pre-shipment inspection (PSI) was in place. But in the current fiscal, the revenue board has withdrawn the system for import of refrigerators.
Moreover, the customs is not capable of checking more than 10 per cent of the goods due to acute manpower shortage and delay in container handling, the report said quoting the customs house commissioner.
A deputy commissioner of the customs house has informed the investigation team about under-invoicing in import of 99 per cent of goods. He said there is no instant solution to the problem as China can produce items at any price whichever is asked by importers.
He also blamed the valuation system for massive under-invoicing of goods.
The investigation team has inspected refrigerators and air-coolers at the Chittagong customs house. They examined different brands of refrigerators but did not find the mention of any country of origin in steel nameplate or on identity boxes, although importers claimed the products are 'made in China'.
The team has sought some documents from the Chittagong customs houses to further dig into the matter including assessment valuation report of the last year, list of importers and exporters, bill of entry and commercial invoice of the last year and duty structures.
Being confirmed about the under-invoicing and false declaration with majority of the imported refrigerators, the team has said withdrawal of the PSI system has fuelled the malpractice.
The report has recommended that the government arrange high-level discussions to stop import of substandard products.
Talking to the FE, first secretary, customs, Khairuzzaman Majumder of the NBR said: "We have received complaints of under-invoicing from local refrigerator manufacturers who alleged uneven competition owing to huge imported products at cheap cost.
The board is reviewing the matter seriously and may launch probe to dig further into the issue, he said.
Local refrigerator manufacturing company Walton has long been requesting the government to take steps for salvaging the local industry. They have requested the revenue board several times to fix a tariff value to determine prices of the refrigerators after withdrawal of PSI.
Mizanur Rahman, secretary general of Bangladesh Refrigerator Manufacturers Association, said: "Local manufacturers import compressor at US$ 35 while some importers show the same import price for a refrigerator."
It will not be possible for the local industry to survive if such cheap imported products flood the market, he said.
The malpractice has turned acute after withdrawal of the PSI system in import of refrigerators in the current fiscal's budget, he added.
An in-depth investigation has found massive under-invoicing and false declaration in import of refrigerators causing a substantial amount of revenue loss to the national exchequer.
The investigation launched by Bangladesh Tariff Commission (BTC) has found most of the imported refrigerators 'without a country of origin', although importers claim they have imported those from China.
A three-member investigation team formed by BTC has conducted the investigation in September last at the Chittagong customs house and the port under the instruction of higher authorities.
The team has recently submitted the investigation report to the National Board of Revenue (NBR) for taking necessary action.
BTC is empowered to recommend slapping anti-dumping, countervailing or safeguard duties if it finds any local industry facing uneven competition with imported goods.
BTC chairman Mozibur Rahman said: "We are planning to impose anti-dumping duty after a final scrutiny on under-invoicing. The BTC will have to collect further documents to defend its stand."
The BTC team has conducted the primary investigation and got confirmed about under-invoicing in import of refrigerators, he said.
"We will go to China and Indonesia to collect more information. The decision might be taken by next month on slapping duty to protect the local industry," he said.
The team has discussed with the commissioners, deputy commissioners and Chittagong port Authority (CPA) officials to know about the actual scenario of the imported refrigerators.
"Chittagong customs house commissioners have blamed faulty valuation assessment system for the massive under-invoicing of the goods," the investigation report said.
The customs department used to check 10 per cent of the imported products through clean report of finding (CRF) when pre-shipment inspection (PSI) was in place. But in the current fiscal, the revenue board has withdrawn the system for import of refrigerators.
Moreover, the customs is not capable of checking more than 10 per cent of the goods due to acute manpower shortage and delay in container handling, the report said quoting the customs house commissioner.
A deputy commissioner of the customs house has informed the investigation team about under-invoicing in import of 99 per cent of goods. He said there is no instant solution to the problem as China can produce items at any price whichever is asked by importers.
He also blamed the valuation system for massive under-invoicing of goods.
The investigation team has inspected refrigerators and air-coolers at the Chittagong customs house. They examined different brands of refrigerators but did not find the mention of any country of origin in steel nameplate or on identity boxes, although importers claimed the products are 'made in China'.
The team has sought some documents from the Chittagong customs houses to further dig into the matter including assessment valuation report of the last year, list of importers and exporters, bill of entry and commercial invoice of the last year and duty structures.
Being confirmed about the under-invoicing and false declaration with majority of the imported refrigerators, the team has said withdrawal of the PSI system has fuelled the malpractice.
The report has recommended that the government arrange high-level discussions to stop import of substandard products.
Talking to the FE, first secretary, customs, Khairuzzaman Majumder of the NBR said: "We have received complaints of under-invoicing from local refrigerator manufacturers who alleged uneven competition owing to huge imported products at cheap cost.
The board is reviewing the matter seriously and may launch probe to dig further into the issue, he said.
Local refrigerator manufacturing company Walton has long been requesting the government to take steps for salvaging the local industry. They have requested the revenue board several times to fix a tariff value to determine prices of the refrigerators after withdrawal of PSI.
Mizanur Rahman, secretary general of Bangladesh Refrigerator Manufacturers Association, said: "Local manufacturers import compressor at US$ 35 while some importers show the same import price for a refrigerator."
It will not be possible for the local industry to survive if such cheap imported products flood the market, he said.
The malpractice has turned acute after withdrawal of the PSI system in import of refrigerators in the current fiscal's budget, he added.