Vehicle firm, Customs in collision course over seats

By Nalaka Nonis

The Customs Department is probing allegations that a leading vehicle importing company had defrauded the State of Rs. 120 million in taxes by declaring 140 luxury vehicles it imported as 10-seater vehicles.

But the company is accusing the customs of failing to carry out a Court of Appeal interim order, according to which investigations should have been concluded by January 29.

The company also said the Customs had failed to honour a Supreme Court order which on Januaray 10 directed the Customs to release documents related to 37 vehicles after obtaining a bank guarantee.

The vehicles were eventually released early this week, but the customs inquiry is in progress. According to the Customs, the vehicles imported were five seaters for which a much higher tariff should be paid.

Customs officials charged the company had allegedly imported 140 luxury vehicles on 16 occasions, declaring the vehicles were ten seaters and thus paying a lesser amount as taxes.

According to the Customs Import Tariff Guide, the duty levied on a motor vehicle with a maximum of nine seats is about 400 percent of the vehicle value as against a duty of less than 250 percent imposed on a vehicle equipped with more than nine seats.

Customs officials charged that to circumvent the rule, the company had fixed additional seats in violation of the Motor Traffic Department regulations.

“The loss the State has suffered from each vehicle imported in this manner is about Rs. 800,000”, a Customs officer claimed.

The Customs officials said there is no ‘10 seater’ vehicle and the company has hidden the truth by declaring the vehicles imported had ten seats while at the same time declaring to the Motor Traffic Department ‘10-seater’ as the type of vehicle.

The officials, however, said the company had to mention the actual number of seats the vehicles, which is five (four plus the driver) when filling out the Seating Capacity section of the Inspection Certificate.

A senior Motor Traffic Department official told The Sunday Times he had come to know about the case but declined to elaborate on it.