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Luxury cars arrive in pieces, CIID probes duty evasion
CIID uncovers consignments of high-end vehicles declared as ‘Used Car Parts’, with potential revenue loss from several cases estimated at nearly Tk50 crore
The cars arrive in pieces.
Declared as “Used Car Parts”, the shipments can contain large structural sections of luxury vehicles – sometimes just three or four cuts of what was once a complete car.
In other cases, different parts are brought into Bangladesh separately and assembled at local garages, turning them into complete vehicles.
There have even been allegations that a BMW imported as parts was assembled locally and driven on the roads of Chattogram using the registration number of another old vehicle.
A series of recent raids by the Customs Intelligence and Investigation Directorate (CIID) has uncovered several such cases, raising questions over a possible new strategy to evade customs duties and taxes and bypass import controls on luxury vehicles.
At Mongla Port, customs officials identified components of four luxury cars in a consignment declared as “Used Car Parts”.
In Cox’s Bazar, a Toyota Supra, Honda Civic and Mazda MX-5 were seized over similar allegations. In another case, a BMW imported as parts was allegedly assembled and used in Chattogram.
More recently, CIID identified fragmented components of a Lexus LX600, Lexus SC430 and BMW M5 in another consignment. The shipment also contained a Honda B18C Type R engine, various half-cuts and other vehicle parts.
CIID Assistant Director Pronoy Chakma told the Daily Sun that the directorate has so far assessed the revenue loss from one consignment.
Several other consignments have also been seized, and the amount of revenue evasion in those cases is being assessed.
“The government lost around Tk12 crore in revenue from the latest consignment that was seized,” he said. “If the other consignments are assessed, the total amount could be close to Tk50 crore.”
Tk9.94 lakh in ‘parts’, vehicles worth Tk4.50-6.70 crore
The Mongla Port case has brought the issue into sharper focus.
During its investigation, Customs Intelligence identified components retaining the “Essential Character” of four luxury vehicles in a consignment declared as “Used Car Parts”.
The vehicles were identified as a 2017 Range Rover Vogue, a 2010 BMW 650i, a 2016 Lexus LX570 and a Toyota Crown Athlete.
According to an initial customs assessment, their estimated market value in Bangladesh was around Tk4.50 crore to Tk6.70 crore or more.
Yet the invoice value of the entire consignment, declared as 14 types of Used Car Parts, was only $7,935.
Based on the declared exchange rate and other expenses, the assessable value was shown at around Tk9.94 lakh, while customs duties and taxes were estimated at around Tk6.7 lakh.
The initial customs investigation found that the vehicles had not been completely dismantled into ordinary spare parts. Instead, they had been cut into only three or four large sections and imported into the country.
The components could subsequently be reassembled to reconstruct the vehicles’ original structures and characteristics.
With assistance from experts from the Bangladesh Road Transport Authority (BRTA) and Khulna University of Engineering & Technology (KUET), customs officials identified the vehicles by analysing stickers, labels, numbers and markings on different components, as well as using AI technology.
Revenue loss still being assessed
The final amount of revenue lost by the government in all the cases has yet to be determined.
According to the Chattogram CIID, the vehicles would have to be assessed as semi-knocked-down (SKD) vehicles under GRI Rule 2(a), rather than ordinary “Used Car Parts”.
This would require calculating their value, engine capacity, age, depreciation, tariff or minimum value, and applicable duties and taxes.
Customs Intelligence said the parts found in the Mongla consignment appeared to retain the “Essential Character” of complete motor vehicles.
The consignment was therefore sent to Mongla Customs House with a recommendation that it be assessed as SKD vehicles.
NBR spokesperson Al Amin said such large consignments were being intercepted because of increased Customs Intelligence activity.
Similar incidents had occurred in the past, he said, but the government was now more alert to the issue.
He said the total amount of revenue evasion would become clear once assessments of all the cases were completed.
‘Parts’-assembled BMW running on Chattogram roads
Within days of the Mongla incident coming to light, another significant case emerged in Chattogram.
CIID received allegations that a BMW imported from Dubai as parts had been locally assembled and converted into a complete vehicle.
According to the preliminary investigation, different parts of the vehicle were released through Chattogram Port and taken to an area in Kaptai/Chandraghona, where they were assembled.
The remaining work was later completed at an automobile garage in the Muradpur area of the city, allegedly turning it into a complete BMW.
An even more serious allegation is that, after being assembled locally, the vehicle was being driven on the road using the registration number of another old BMW.
Chattogram Customs Intelligence and Investigation Directorate Assistant Director Sohan told the Daily Sun that the issue of revenue evasion has not yet been finalised.
It will take a few more days to complete the assessment, he said.
Supra, Civic and MX-5 seized in Cox’s Bazar
Following the Chattogram incident, CIID seized three vehicles in Cox’s Bazar over similar allegations.
The vehicles are a Toyota Supra, Honda Civic and Mazda MX-5.
On the night of 27 August, a CIID team conducted a raid at Ocean Paradise Hotel and Resort on Kolatoli Road in Cox’s Bazar and identified and seized the vehicles.
CIID’s preliminary allegation is that the vehicles had been brought into the country as parts and later assembled locally into complete vehicles.
During the raid, CIID officials also noticed that the vehicles carried markings such as “SINH4”, “S4FIAT” and “ESH4H” instead of conventional registration number plates.
Rezvi Ahmed, additional director general of CIID’s Chattogram regional office, said the seized vehicles included a 2021 Toyota Supra and a 2020 Mazda MX-5 Miata.
An investigation is also underway to determine whether an attempt was made to evade customs duties by importing vehicle parts as “Used Car Parts” and subsequently converting them into complete vehicles.
Risk not only to revenue but also to legitimate vehicle businesses
If it is proven that complete vehicles, or components retaining the “Essential Character” of vehicles, are being brought into the country in the name of parts and then assembled locally, the impact will not be limited to government revenue.
It could also create unfair competition for businesses that import vehicles through legal channels, said Abdul Haque, president of the Bangladesh Reconditioned Vehicle Importers and Dealers Association (BARVIDA).
He said legitimate importers have to comply with prescribed duties and taxes, valuation and import regulations.
Those who conceal the actual identity of vehicles and bring them in at lower declared values as parts, however, may gain an advantage through a different cost structure. Recommended Stories