The New Nation - Internet Edition

Syful Islam

The government lost around Tk 1200 crore revenue last year due to gross irregularities of Pre Shipment Inspection (PSI) companies, the customs intelligence and joint forces revealed.

The irregularities includes mis-declaration of import, wrong HS code classification, under invoicing and tax evasion during import through third country. The government recently cancelled contract of a PSI company for its alleged involvement in irregularities but the remaining three companies are no less corrupt.

In the recent past the customs authority has fined the PSI companies and took different actions against those for irregularities.

According to the findings of the Customs Intelligence Department, PSI Company Bureau Veritas Bangladesh Ltd had issued clean report findings in favour of many importers who imported Chinese-made polyester woven fabrics and texture through Singapore.

The BV valued $ 1.82 and $1.87 per kg of the products instead of the actual value of $6.54 and $5.03 per kg. The customs intelligence found around 12 lakh kg woven fabrics and texture were imported through third country and these products released at Dhaka Inland Container Terminals.

Due to the forgery of BV the companies had evaded taxes of around Tk 39 crore. BV has also imported Ireland and UK origin milk powder through the third country Singapore and evaded taxes of around Tk 18 crore for only a few consignments. BV showed price for per ton milk powder $ 2509.73 against the actual price of $4928 per ton.

The joint forces recently identified that another PSI company Intertek Testing Services (ITS) helped importers evade tax of around Tk 46 lakh for only 13 separate consignments of refrigerators, weaving machine parts, spinning mills parts, diesel engine parts, micro computer input and air conditioner parts.

The intelligence found that the company stated inacurate capacity of refrigerator, classified product specification of weaving machine parts and spinning mills parts wrongly brought excess weight and excess goods of diesel engine parts, micro computer input and air conditioner parts over their declaration.

The Chittagong Customs imposed a penalty of Tk 1 crore between December 2007 and February 2008 period for their involvement of the forgery. Customs sources said the company was fined severai times for the same reason in previous years also.

PSI company SGS also joined in the irregularities to help the importers evade taxes. The government lost crores of Taka due to dishonesty of the officials of the inspection company in the last couple of years.

The joint forces and customs department identified that like other PSI companies SGS also imported industrial engine bearing and thinwall bearing announcing wrong Harmonized System of Code. Due to this irregularities the company help evade taxes of huge amount of money just for the two consignments.

Experts claimed that the government has lost around Tk 15,000 to Tk 20,000 crore revenue each year from customs sector due to issuing false clean report of findings by the PSI companies and corruption in connivance with customs officials.

Former Chittagong Customs Commissioner Lutfor Rahman in an internal assessment about irregularities of PSI companies found that the customs department realised Tk 21 crore as excess amount from importers, which were certified wrongly by PSI companies.

In his report, he said the PSI Rules 2000 do not permit more than 10 per cent physical inspection of imported products. "If the government allows more than 10 per cent inspection the corruption of PSI companies will be identified manifold than the current rate," Lutfor quoted the report.

Meanwhile, the customs commissioners earlier at a meeting with NBR chairman expressed their opinion to discontinue services with PSI companies from next year.

"If the government spends a portion of money from what the PSI companies get as service charge, it would increase the capacity of customs department significantly and there will be no need for PSI services," a commissioner said during the meeting held at the NBR.

Four-PSI companies take around Tk 250 crore service charge yearly for their evaluation.

The government had decided to appoint an international audit agency to monitor activities of PSI companies but failed to do so due to the opposition of some unscrupulous customs officials and businessmen.