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For more than 20 years Chittagong Port Authority (CPA) has been missing out on its share of sale proceeds of auctioned goods from Chattogram Custom House, which has now piled up to over Tk 125 crore.
The port authorities have so far sent 37 letters to the customs authorities seeking its owed money, which according to officials has been stuck due to bureaucratic complications and non-implementation of regulatory decisions.
According to CPA sources, regulations mandate that customs pay shares of auction sale proceeds to stakeholders within 10 days of goods delivery. But that has not been the case when it comes to implementation. Multiple meetings between CPA, National Board of Revenue (NBR), and the Ministry of Shipping have also failed to bear any fruit in this regard.
Depending on how auctioned goods were imported or due to be exported, the bailee (CPA) is owed a maximum of 20% or 15% of the bid price of the auctioned goods.
CPA has been asking for its unpaid dues from Ctg Custom as per a decision made in a meeting of the officials of the Internal Resource Division, NBR and the Ministry of Shipping at the boardroom of Chittagong Port on January 6, 2013.
In its last letter to Ctg Customs on October 19, the CPA stated that it owes Tk 125.68 crore in unpaid auctions shares.
On March 15 and August 6 in 2018, two more meetings were held on the issue with the then shipping secretary in chair, according to sources. The meetings decided that sale proceeds from auctions held by the NBR will be deposited in separate codes in the name of CPA and Chattogram Custom.
But that decision too did not see realisation, keeping CPA’s auction shares stuck in limbo.
On August 24, 2021, in the last meeting under the chairmanship of Additional Commissioner of Ctg Custom House in the presence of senior officials of both parties, the amount of dues per lot was sought from CPA.
CPA, following the instruction, provided a detailed account of its owed money along with proof of lot based share of the goods sold in the auction. Still, no progress has been made in this regard till date.
The uncollected dues have now become more than a money problem for CPA. An audit objection has been raised against the CPA for not collecting the due amount, forcing the port authorities to settle the matter urgently.
“These dues have remained uncollected for years. We are regularly sending them letters about it. But no mentionable progress has been made,” Omar Faruk, secretary of CPA, told The Business Post (TBP).
Complications
Meanwhile, Ctg Custom officials said CPA’s claim of unpaid auction shares is actually a lot less than stated in the latest letter. But the dues keep getting bigger every year due to high interest rates.
“It is true that customs owe money to CPA in auction shares. However, there are some complications. Because, as per the law on paying auction charges, not much money remains from the sale proceeds after the initial charges are paid. As a result, the dues demanded by the port could not be paid,” Ctg Custom Commissioner Md Fyzur Rahman told TBP.
According to section 201 of the Customs Act, the sale proceeds of auctioned goods must first be used to pay the expenses of the sale; then to pay the freight or other charges, if any; then to pay the customs-duty, other taxes and dues payable to the government; then to pay the charges due to the person holding such goods in custody.
And finally, the balance, if any, shall be paid to the owner of the goods, provided he applies for it within six months of the sale of the goods or shows sufficient cause for not doing so. Now, after making the above payments, a maximum of 20% of the bid price of the auctioned goods or the remaining amount, whichever is less, shall be paid to the bailee of goods imported or exported in containers as service charge.
In case of goods exported or imported by any other means, a maximum of 15% of the bid price of the auctioned goods or the remaining amount, whichever is less, shall be paid to the bailee or in this case, the CPA.
