The Office of the Attorney General (OAG) charged 18 importers, business entities based in Thimphu for tax evasion, by not declaring their consignments worth Nu 2.114 million at the Regional Revenue and Customs office’s in Phuentsholing on November 21, 2014.
Along with them, two customs inspectors are charged for omission amounting to abuse of functions and two drivers for participating in the offence. The 22 defendants were among the 28 individuals, who were charged at the Phuentsholing dungkhag court by the OAG on June 5. The other defendant is a non-Bhutanese who evaded indirect tax by not declaring a consignment imported from third countries worth Nu 5.234 million.
The sales tax evaded by 18 importers stands at Nu 115,188.
The prosecutor, requested the court to restitute Nu 0.968 million to the state inclusive of application fines and penalties from the defendants for knowingly and purposely evading sales tax. Two truck drivers transported the consignments from Phuentsholing to Thimphu.
The Anti-Corruption Commission (ACC) had recommended the OAG to charge the jumbo-truck driver with 16 counts of participation in an offence and the DCM truck driver with 10 counts of the same offence. However, the OAG has charged them only for participation in an offence.
The investigation established that the two drivers were not mere transporters for importers, but were agents with close relationship with inspectors and suppliers across the border. They were capable of negotiating with inspectors to ‘mis-declare’ the consignments they transport.
Two regional revenue and customs’ inspectors were also implicated with eight to 11 counts of offences of omission amounting to abuse of functions. The commission stated in the report that the two inspectors in the pretext of not being able to perform their duties diligently chose deliberately to omit their professional mandate.
The OAG charged both inspectors knowingly abused their functions by omitting to assess and verify when one of the drivers declared consignments of importers at the entry gate in Phuentsholing.
Inspectors of RRCO are deputed at entry point on shifts, from 8-2am and from 2-10pm to monitor the consignments entering and exiting Bhutan. “While on duty, the inspectors are required to be vigilant and render their services diligently,” the investigation report stated.
The ACC began investigation after receiving an anonymous complaint alleging that a Jumbo truck and DCM were transporting goods from Phuentsholing to Thimphu without declaring taxes at the point of entry on November 21, 2014. During the course of investigation, the commission interrogated 29 individuals and two persons were detained and released on execution of bond.
The investigation established that the importers ordered their goods from Delhi, Siliguri and Jaigaon, India. The goods were sent by the suppliers and transported by the Jumbo-truck driver from Jaigaon to Thimphu. Having worked closely, the driver in question had gained the confidence of the importers who then requested him to declare their goods and pay taxes.
As a regular transporter, the driver also knew inspectors and developed close acquaintances through which he knew their duty rosters, enabling him to negotiate with them for consideration.
The commission stated that the two trucks were used as an instrument of crime to ferry undeclared goods and seized the two vehicles along with the consignments.
The investigation confirmed rampant occurrences of trade fraud in Phuentsholing, which is the main trade gateway of Bhutan and accounts for about 80 to 90 percent of trade in the country.