Govt incurs Tk 5.83cr loss for duty dodge by mobile brands

The government has suffered a loss of over Tk 5.83 crore as revenue in a year from import of only five brands of mobile handsets as a group of unscrupulous traders dodged the duty through under-invoicing of the prices. According to official data, a total of 81,566 mobile handsets of five brands—Lava, 5 Star, TINMO, G Five and Wimax—were imported during December 2013 to December 2104 period. Describing the scenario as a horrific state of evading duty, the sector insiders said the amount would be even larger if the entire picture is brought into consideration, reports the Daily Sun.

mobile moneySources said the section of traders evaded the duty by under-invoicing the prices of the products. According to information, a mobile handset of 5 Star brand of F30 model is retailing at local market at Tk 8,000 while its FOB was recorded only Tk 420 ($6). It was learnt that to evade a large amount of duty, the scrupulous traders are under-invoicing the prices. Sources said that after the government has imposed 10 percent additional duty on imported mobile phones, the unscrupulous importers have resorted to deception resulting in losses of crores of taka of the government. And this way, the traders have dodged Tk 63,43,601 importing mobile handsets of Lava brand during the aforementioned period. The amount of duty the traders evaded by importing 5 Star brand mobile handsets was Tk 1,38,22,080.

Traders evaded duty of Tk 7,38,400 while importing TINMO and 5 Five brand mobile, the data confirmed. It was learnt that the traders evaded duty of Tk 3,74,35,860 in the period while importing Wimax brand mobile handsets. The document shows, on 10 April last year, a trader imported 5,000 pieces of 5 Star brand mobile sets, model T10 showing Tk 520 in its FOB.

While visiting the sales centres, it was seen that the prices of the same mobile handset was Tk 3,950. Importers have to inform the customs department about the prices of mobile phone sets while the customs department impose duty as per their assessment. Later, the importers fix retail prices by adding 30 to 35 percent value to keep profit margin. It was also alleged that the importers have been importing handsets by declaring those as normal phone sets though they were smart phones, causing a huge loss to the government.

According to information, the country’s mobile phone market is around Tk 5,500 crore. Admitting to such irregularities, Engineer Md Nizam Uddin Jitu, President of Bangladesh Mobile phone Traders’ Association, said such irregularities along with dodging duty of the government are also putting the honest traders into an uneven competition. Nizam also said that around 2.7 crore mobile phone were imported in the country during the last fiscal year.

Admitting to such allegation, Farid Uddin, member (Customs and VAT), said the authorities always remain alert to avert such tax evasion. He also said if they receive any specific allegation of tax evasion, they will take necessary action in this regard.