Customs to finally sell luxury cars but only five
In the auction, around Tk17 crore was offered for all the 112 luxury cars. But the auctioneer will not be able to sell the remaining 107 cars now owing to legal obligations as the bidders have offered less than 60% of the reserve price. So, there is now no other way but to scrap these cars.
Highlights
- The cars worth $21m or Tk180cr have remained uncollected for 8 years at the port yard
- Engines, batteries, wheels and other parts were damaged for auctions not being held in good time
- Experts blame inefficiency on the part of customs for this
The Chattogram customs house, in its fifth attempt, is finally going to sell off only five out of 112 luxury cars imported with a duty-free privilege called the Carnet de Passages.
From the latest auction last month, the customs authorities have sought approval of bids for the vehicles from the National Board of Revenue (NBR).
In the auction, around Tk17 crore was offered for all the 112 luxury cars. But the auctioneer will not be able to sell the remaining 107 cars now owing to legal obligations as the bidders have offered less than 60% of the reserve price. So, there is now no other way but to scrap these cars.
A reserve price is a minimum price that a seller would be willing to accept from a buyer.
The luxury cars worth $21 million or Tk180 crore in separate containers have remained uncollected for eight years at the Chattogram port yard.
The vehicles are not being sold even after advertisements were published in various newspapers no fewer than five times through spending money.
The engines, batteries, wheels and other parts of these vehicles were damaged owing to auctions not being held in good time.
Experts say due to inefficiency on the part of customs, the vehicles were not auctioned in time, and thus not only customs suffered from financial losses but normal activities at the port were also disrupted due to the occupation of space in the yard, affecting the country's overall economy.
According to sources at the port, the Chattogram Port Authority could have handled at least 33,500 containers in the last eight years in the port area, which has been occupied by 112 containers containing luxury cars. With this, the revenue of the port would have been around Tk37 crore and at the same time, handling activities in the port would have increased.
NBR former chairman Md Abdul Mazid said the value decreases when a product is repeatedly auctioned. The customs authorities could have settled the auction of these luxury cars in consultation with the higher authorities. Due to the passage of time, the prices of cars have come down. So, the auction issue relating to the cars should be settled as soon as possible. If the cars are not sold at the current price, the price will go down further.
Meanwhile, due to this inefficient management of customs, the number of vehicles parked in such an important customs station in the country is unprecedented, say experts.
As a result, the financial loss of about Tk180 crore has adversely affected the country's economy. The Chattogram Customs House needs to be brought under more modernisation. The experts have suggested that customs be more efficient in these matters.
Chattogram Port has the capacity to hold containers of 49,018 TEUs (twenty-foot equivalent units). The port handles more than 3 million containers a year.
Port officials said the port's productivity is being wasted due to the abandonment of containers year after year when new projects are being implemented to increase the port's container handling capacity.
Mohammad Omar Farooq, secretary of the Chattogram Port Authority, told The Business Standard that a letter was sent to the customs authorities to remove the containers from the port.
"If these containers were removed in time, the activities of the port would be more dynamic. The port would collect more revenue. Therefore, for the benefit of the country's economy, the containers should be removed as soon as the auction of the cars is gone through," he added.
Among the 112 vehicles arriving at Chattogram Port from different countries with Carnet de Passage facilities are 26 Mitsubishi, 25 Mercedes Bench, 25 BMW, seven Land Rovers, seven Land Cruisers, one CRV, six Lexus, five Ford, three Jaguar, one Daewoo and one Honda.
Carnet de Passage is an international customs facility that allows tourists to temporarily import their private vehicles without paying any duty for a limited period on the condition of re-exporting them at the end of their stay.
This facility has allegedly been abused by some quarters for years.
Usually, non-resident Bangladeshis, foreign tourists, diplomats and persons entitled to special facilities import luxury vehicles under the facility. But customs found that many of those cars were never re-exported as per conditions.
As Bangladesh levies hefty duty – from 100% to 500% or more – on the import of cars, some people try to bring sport utility vehicles (SUVs) using the Carnet de Passage facility, an official of the Chattogram Customs House said.
Earlier in 2013, the National Board of Revenue had scrapped the facility in 2013 after it detected some unscrupulous importers were using it to evade taxes.
The 112 luxury cars have been auctioned five times since 2016 and the latest auction took place on 3 and 4 November both online and through conventional means. Success did not come even in the fifth auction.
However, 551 tenders were received for the 112 vehicles, where the reserve value of a car was fixed from Tk4.30 crore to Tk50 lakh. But the tender price has been offered from a minimum of Tk50,000 up to a maximum of Tk53 lakh. The price of the 112 cars has been offered up to Tk17 crore only. However, at the customs auction, the reserve value of these vehicles was set at around $21 million or Tk180 crore.
People concerned say that customs is responsible for these losses as the vehicles got damaged because of proper action not taken. There is no option now but to scrap the vehicles.
Chattogram Customs House Deputy Commissioner Al Amin told TBS that a letter was sent to the National Board of Revenue on 2 December for approving bids for five vehicles. If approved, the cars will be handed over to them soon. The remaining cars will be auctioned off in phases.
Asked which cars have been put up for auction, he said it was not possible to provide information on the recommended vehicles before getting NBR approval. This is because the recommended vehicles may be excluded from the list or other vehicles may be included.
In response to a question whether the auction had failed because of the recommendation to approve only five vehicles after the auction was held for the fifth time, Al Amin said he does not see any failure. At the price mentioned by bidders, the government will get revenue of at least Tk17 crore.
According to customs law, goods have to be unloaded within 30 days of arrival at the port. If the goods are not taken within this period, the customs authorities give notice to the importer. If the goods are not unloaded within 15 days of the notice being served, the customs authorities will auction the goods. As per rules, the customs authorities arrange auctions once a month. But in the eight years since the cars arrived at the port, they have been put up for auction only five times.
Why regular bidders did not take part in the auction
About 80 businessmen usually take part in auctions of the Chattogram Customs House. But these businessmen did not take part in the car auction this time. They say the auction catalog mentions how many times the cars have been auctioned earlier. But it was not mentioned in the cars' catalog. This has confused the businessmen. Moreover, the regular businessmen of the auction did not submit bids in the auction without the CP approval of the commerce ministry.
The businessmen said that besides the money spent by the Chattogram Customs in putting these cars up for auction, the working hours of the officials are being wasted. With only five cars recommended for sale at the auction, customs has maintained a kind of hide and seek in the car auction.
The CP is required for cars to be unloaded from the port after five years of their arrival. Since the vehicles have been lying in the port for eight years, it will not be possible to unload these vehicles without the CP of the commerce ministry. Auction businessmen are not interested in buying these cars due to delays in getting the CP.
No matter how many cars are put up for auction without CP approval, the auction will not be successful. Moreover, for the last eight years, the customs authorities have not taken the issue of selling these cars seriously. As a result, cars worth crores of taka cannot be sold even after repeated auctions. Thus, the government has lost a huge amount of revenue.
In this regard, Deputy Commissioner of Customs Al Amin said, "Hopefully, we will get the CP of the vehicles soon. The Chattogram Customs House has already written to the National Board of Revenue for the approval of the CP. The National Board of Revenue has written to the commerce ministry in this regard."
