The National Board of Revenue has lost around Tk 22,000 crore in revenue due to violation of the customs valuation rules for assessing the duties on petroleum products imported by Bangladesh Petroleum Corporation.
Both customs and Bangladesh Petroleum Corporation officials have been violating the rules since 2005 not assessing the duties on imported petroleum products at actual import prices.
The assessment had been conducted at the fixed tariff value or minimum import price set by the National Board of Revenue though the Customs Act-1969 says that assessment should be conducted at actual price of imported goods if the price is higher than the tariff value.
The National Board of Revenue fixes tariff value or minimum import price of any goods to prevent duty evasion through under-invoicing or showing less value of imported goods.
The revenue board in 2005 fixed the tariff value of petroleum products at US$ 40 per barrel though later the import prices of the products reached up to US$ 150 per barrel.
But the Chittagong Customs House has always made assessment of petroleum oils at US$ 40 per barrel and collected duties and taxes on that price.
The NBR found that the government incurred revenue loss worth Tk 22,000 crore due to this violation of the law.
The responsibility, however, always goes to importer to declare the actual import price at customs house for assessment purpose.
The revenue board has recently decided to collect the money from the BPC, officials of the NBR said.
The issue will be placed at the cabinet committee on economic affairs for decision, they said.
Officials said that the irregularities recently came to light after Petromax Refinery, a private petroleum oil refinery, applied to assess their imported crude oils at fixed tariff price like assessment made for BPC and its subsidiary Eastern Refinery.
Initially, the revenue board decided to exempt the BPC from paying the duties and taxes through giving retrospective effect of the gazette notification related to tariff value of petroleum products.
The NBR has sent a draft of gazette notification to the law ministry for vetting but the law ministry sent back the draft seeking query on some issues including whether there were any government policy decision or not on assessing the tariff value.
In reply to the law ministry, the NBR said that there was no policy decision of the government in this regard.
It also said that there was no intention of tax evasion on the part of BPC in this case, rather it was just a mistake and long-followed practice.
In addition, the government itself will has to pay the duties and taxes or has to collect from consumers fixing the prices of petroleum oils at higher rate if the revenue board decides to collect the duties and taxes on actual prices with retrospective effect.
Then the law ministry said that there was no legal scope of exempting the BPC from paying the duties just considering the irregularity as long-followed practice and mistake. The NBR rather can take legal actions against the BPC for not paying duties as per law.
The NBR at a board meeting held on August 31 decided to collect the duties from the BPC as it would increase the tax-GDP ratio of the country.
The decision will now be sent to the cabinet committee on economic affairs for decision.
Officials said that collection of duties from the BPC would not create any difference in actual revenue collection as the amount would be shown as book adjustment.
But the step is important for implementation of the provision of the law, they said.
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