The Directorate General of Forces Intelligence has recommended forming an inter-ministerial committee to facilitate the release of more than 2,000 imported reconditioned vehicles that have remained stranded at Mongla Sea Port for last few years.
The committee will work on the basis of recommendation from business community which demands “a rational depreciation rate and relaxed duty payment procedure” for speedy release of the cars.
The committee will work to implement joint decision by finance, commerce, and shipping ministries so the cars could get released by the four months time ending on 24 April, the DGFI said at a report.
The report blamed inefficiency of the authorities concerned for failure in dissolving the matter despite several initiatives.
The government allowed import of reconditioned vehicles from Japan since 2009 through Mongla port to reduce pressure on Chittagong port.
But a huge number of cars were not released from the port due to duty related complexities and lack of coordination between finance ministry and commerce ministry.
The price of the reconditioned vehicles becomes higher than the brand new cars due to import duty hike on reconditioned vehicles in the FY2012-13. It caused the number of cars releasing from port to decline.
It also blamed lack of coordination between shipping ministry, commerce ministry and the NBR.
In 2013, commerce ministry banned import of vehicles of more than five years and thus many cars, which were under import procedure, got stuck at the port.
Many of the importers failed to pay additional port fee and the duties to release their cars. Many of them failed to repay bank loans and became loan defaulters. The report said the authorities also failed to hold auction of the vehicles.
“As the cars were not released for long, the port authority on December 14, 2014 started auction process for 364 vehicles, but failed to get expected level of buyers due to additional duty and because of indirect lobby by importers to foil the auction,” the report stated.
Although Bangladesh Reconditioned Vehicle Importers and Dealers Association (BARVIDA), Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and finance ministry took initiatives to ease the duty procedure and release the cars, but failed.
Later, the Prime Minister’s Office took an initiative to resolve the dispute by giving the cars to law enforcement agencies.
However, BARVIDA was later given four months from December 24 last year to get the cars released.
Currently, there are a number of 2,079 vehicles, worth around Tk300 crore, stranded at the port due to valuation complexities and unauthorised import of more than five-year old cars.
Among them, a total of around 1,000 units of reconditioned cars, imported between 2009 and 2013, remain unreleased due to complexities in customs valuation.
Another 512 unit of cars are five-year old and were imported violating import policy. The rest of the cars could not be released because of then politically turbulent situation, BARVIDA said.
It said the importers were yet to get any concrete decision from the NBR about the stranded cars. “We are ready to release the cars if the government gives us a 95% depreciation facility or fix a duty slab of Tk2 lakh each for the release of around 1,000 units of imported vehicles,” said BARVIDA President Abdul Hamid Sharif.
He urged the government to implement the July 2014 PMO order which instructed commerce and shipping ministries and the NBR to take necessary measures on releasing the vehicles.
“The cars could be released only if the demand was met exempting of all other taxes and duties,” Abdul Hamid said.
On October 7 last year, PMO decided to hand over all the piled up cars at Mongla Port to Bangladesh Police by December 31 to enhance the strength of the force.