Rajesh Rai | Phuentsholing

Two dumper truck dealers, TCD Trader and Ugen Auto in Phuentsholing are under the Anti-Corruption Commission (ACC) radar for an alleged Green Tax (GT) evasion worth millions (M).

Although the details are sketchy at this moment, Kuensel learned from sources that these dealers have evaded taxes for more than 250 trucks.

The dumper trucks the dealers import are designed for off-highway use and only 10 percent GT is applicable. Sales tax (ST) and customs duty (CD) are not applicable.

As per the Section 63 of the Customs Act of Bhutan (2017), “the imported and export goods whether dutiable or exempted shall be declared to the department at the customs station and customs area.” And, as per the Customs Rules and Regulations of Bhutan (2017), a person shall declare goods to the customs at the entry point of exit point.

This means, the dealers or importers are accountable to pay the taxes at the points. But the two dealers have not declared the GT.

Considering the cost of dumper trucks, ranging from Nu 1M to more than Nu 2M, the two dealers could be liable to pay a hefty penalty. For instance, if a person has not paid the tax for a truck costing Nu 1M, he or she would have to pay Nu 500,000 in fines—which would be equivalent to Nu 100M for importing 200 such trucks.

This is as per the Customs Act, which states: “A person shall pay a fine of 50 percent of the value of the goods evaded in addition to the amount of customs duty, if the person does not declare or willfully miss-declare imported or export or transited goods.”

Additional to the penalty, the 10 percent GT will also be payable.

Meanwhile, it is likely the evasion took place when the export of boulders from Phuentsholing and other southern dzongkhags was at the peak in 2018 and 2019.

With the mushrooming of boulder business in the bordering town since 2018, the market saw a huge upsurge in import of dumper trucks.

Sources said more than 1,000 dumper trucks had hit the market.

In 2019, according to the Bhutan Trade Statistics (BTS), Bhutan imported dumpers (designed for off-highway use) worth Nu 843.26M and stood as the ninth among the top 10 imported commodities. That year, the country exported boulders with Nu 4.97 billion (B), second in the 10 top exported commodities.

The highest import of off-highway use dumpers was recorded in 2018 with an import worth of Nu 1.91B. It was the fifth highest imported commodity. Boulder then was the second highest exported commodity and Bhutan had exported boulders worth Nu 2.12B.

Between January and June 2020, although the import of dumpers didn’t make it in the top 10 list as per the provisional BTS, export of boulders still stood at the third most exported commodity with Nu 899.91M worth boulders being exported.