The Office of the Attorney General (OAG) charged Ugen Auto for alleged Green Tax (GT) evasion worth more than Nu 15 million for 75 Bharat Benz dumper trucks imported between 2018 and 2020.
The OAG registered the case at the Thimphu dzongkhag court yesterday and charged the company’s proprietor for tax evasion as per section 63 and 146 of the Customs Act of Bhutan and 283 section of the Penal Code.
The OAG stated that the defendant, who was fully aware of the procedural and systematic lapses with the Regional Revenue and Customs Office (RRCO) and Road Safety and Transport Authority (RSTA) in Phuentsholing, had evaded GT amounting to Nu 15,008,267 by not declaring 75 dumpers at the point of entry (PoE).
“This can be corroborated when his dealing officer had informed the defendant in writing for the GT due but he deliberately ignored to pay,” the OAG submitted.
The OAG also submitted that Ugen Auto came forward to declare and pay GT for 75 dumpers that were already registered with the RSTA only when the Anti-Corruption Commission (ACC) was investigating the alleged tax evasion. Import of dumper trucks designed for off-highway use are liable for 10 percent GT.
Ugen Auto imported 26 dumpers in December 2018 and January 2019 and another 49 dumpers entered Bhutan between April and September 2019 without declaring the vehicles or paying the GT.
The OAG also requested the court for restitution of Nu 75.041M since Ugen Auto had already appealed before the civil court for waiver of the fines and penalties.
Based on the previous precedent set by ACC and judiciary like the JPLP tax evasion case where defendant was arrested and detained, OAG requested the Thimphu chief judge to arrest and detain the defendant.
ACC’s investigation that began in April 2020 looked into alleged tax evasion from January 2017 to December 2020. It determined that within that period, Ugen Auto, Ugen Earth Movers and Ugen Trading House combined had imported around 691 vehicles. Out of which, 431 vehicles were found to be Bharat Benz dumpers.
It was observed that 75 out of 431 dumpers were not declared with RRCO, Phuentsholing at PoE. Both Customs Act and Rules and Regulations of Bhutan 2017 require all imported goods whether dutiable or exempted to be declared to the customs station at the PoE.
Similarly, Tax Act 2012 and Sales Tax, Customs & Excise Act of Kingdom of Bhutan 2000 required GT to be paid for the import. Altogether, Ugen Auto was found to have evaded GT amounting to more than Nu 15M by not declaring 75 dumpers at the PoE.
ACC found that the trucks were imported between 2018 and 2019 and sold to local customers. Most of the trucks were also registered with RSTA between 2019 to 2020 and few in 2021. As per ACC, Ugen Auto’s proprietor came forward to declare the trucks with the RRCO and paid the applicable GT during the commission’s investigation that was also after the commission asked the firm to furnish import declaration documents.
The firm was imposed fines and penalties (50 percent of the value of the goods) in addition to the applicable GT by RRCO. While the firm had cleared the applicable GT amount, the fines and penalties amounting to more than Nu 75M imposed by RRCO was appealed at three levels – regional, department and ministry.
As decided by the Regional Tax Appeal Committee, the Tax Appeal Committees of both the department and ministry maintained status quo on the imposition of fines and penalties assessed by the RRCO, Phuentsholing. In view of the Covid-19 pandemic situation, the ministry’s Tax Appeal Board, based on its decision of October 8, 2021, provided Ugen Auto with the option to pay the fines and penalties on instalment basis within three years.
However, there was no decision regarding imposition of 24 late penalty on the evaded GT amounting to Nu 15M. The firm was given a month’s time period to appeal to the court in the event of dissatisfaction with their decision.
The ACC referred the case to OAG for prosecution last year and recommended to charge defendant for committing the offence of protection of public property and revenue under section 61 of Anti-Corruption Act of Bhutan (ACAB) 2011.