Rs.3 b loss due to duty irregularities

The Committee on Public Accounts (COPA) has observed that when the Toyota Hilux Smart Cabs were imported, due to the levying of lower Customs duties intended for single cabs, a loss of Rs.3 billion had occurred at Rs. one million for each of the 3,000 vehicles.

The Committee has observed that a large amount of tax income is lost to the Government due to tax irregularities in the importation of vehicles and the registration of these vehicles with the Department of Motor Traffic.

These observations are contained in the first report of the Committee on Public Accounts for the first session of the 9th Parliament which was presented by COPA Chairman Prof. Tissa Vitarana on July 20 in the Parliament, the Parliament Communications Division said.

According to the report, vehicles imported for special purposes at a lower tax rate are registered with the Department of Motor Traffic as dual-purpose vehicles.

In addition, during the period 2010-2019, 44 vans were imported as special purpose vans with a lower tax rate and subsequently registered with the Department of Motor Traffic as dual-purpose vehicles for the purpose of transporting passengers and goods and due to this process government has lost at least Rs.1,300 million in taxes.

The report further observes that the government has lost Rs. 56 million in taxes due to a Toyota Land Cruiser not being properly cleared by the Customs under the passenger transport category. It has been revealed that a Toyota Land Cruiser luxury vehicle fitted with a Public Address (PA) system had been charged only a duty of Rs.1.5 million under the special purpose vehicle category. If cleared under the category of transport of passengers, a duty of approximately Rs.56 million would have been charged.

The Committee has also observed that in order to avert the irregularities in the importation of special purpose vehicles, the vehicles cleared under Harmonized System Code (HS code) No 8705 by the Customs should be registered with the Department of Motor Traffic under a special number scheme.