Anti-Corruption Commission (ACC) is reviewing an alleged misuse of import exemption granted to the Hotel Riverside in Changbangdu, Thimphu.
ACC officials said that the commission is also looking into the case to determine whether it merits investigation or if it falls within the purview of the Tax Act 2000.
Finance Secretary Nim Dorji wrote to ACC on September 18 last year after the Tax Appeal Board recommended finance ministry to forward the case to the commission.
The letter also stated that the exempted goods were not found at the premises of the Hotel Riverside during the post clearance audit and the co-proprietor of the hotel, Pema Namgyal, denied having imported goods from China.
Pema Namgyal had told the post audit team from the Regional Revenue and Customs Office in Thimphu that someone had illegally imported goods in the name of the hotel and misused the exemption.
“All these findings indicate element of corruption and hence require a detailed investigation,” finance secretary said in the letter to the ACC chairperson. “Since the case has elements of corruption and the Ministry of Finance lacks expertise to carry out such an investigation, we would like to forward the case to your agency.”
According to the Tax Act, all exempted goods shall be subjected to post clearance audit at any point of time.
Pema Namgyal told Kuensel that he had given supply order worth Nu 12.2 million to furnish 60 bedrooms, including supply of beds and mattresses to his close friend Thinley Wangchuk based on quotation submitted in the name of Lhathing Enterprises.
He said that he paid Nu 12 million to the supplier to deliver goods and furnish hotel bedrooms of buildings A and B in 2014. The supplier delivered and furnished orders worth only Nu 6.941 million, out of which he rejected materials worth Nu 2 million, he added.
He also alleged that Thinley Wangchuk had availed of fiscal incentive or the tax exemption of Nu 6.3 million based on the quotation of Nu 12.2 million by forging his and his nephew Wangchuk’s signatures and documents.
“When customs officials visited the hotel premises and told me to show the goods imported from China for the post clearance audit, I was shocked to hear that I had availed tax exemption in the name of the Hotel Riverside,” Pema Namgyal said, adding that tax exemption should have applied through Lhathing Enterprises.
As per the record obtained by Pema Namgyal, Thinley Wangchuk had imported goods worth USD 155,174 from a company called White Bright Industrial Limited based in Gaungzhou, China in 2014.
Pema Namgyal said that he knew about the misuse of tax exemption only after he applied to Tourism Council of Bhutan (TCB) for tax exemption certification worth Nu 1.2 million for two elevators, curtains and kitchen utensils.
“They asked me for password to process tax exemption again which I was not aware at all,” Pema Namgyal said. “When I checked, I found that Thinley Wangchuk had availed of tax exemption before.”
He said that the relevant agency could check through a banking channel whether the payment for imported goods was made from Hotel Riverside account.
For the purpose of sales tax/import duty exemption of the tourist hotels, proprietors have to apply for certification from TCB.
Thinley Wangchuk was not available for comment.