2023-01-31 16:38:42 BdST
Record cars imported despite dollar crunch
The two crises — the Covid-19 pandemic and the Ukraine-Russia war — have led to a major economic crises across the world. Bangladesh is also facing the crises as the value of the dollar has increased against the local currency. In this context, the government has taken an initiative to control the import of unnecessary and luxury goods.
The government has brought car imports under cent percent LC margin as they are considered as 'luxury goods'. But, the initiative could not stop the import of cars as 6, 799 more cars were imported in 2021-22 fiscal year compared to the previous fiscal. Total numbers of car import in last fiscal year also hit a five-year record.
According to the sources, a high number of cars were imported in the country in the fiscal year 2021-22 without taking into consideration the rules and regulations of the government.
Meanwhile, the traders are bringing cars without LC as the government took hard policy on importing luxury goods. As a result, complications have arisen regarding how the cost of importation of cars without LC will be paid and how Chittagong Customs will impose tax on those cars.
According to the sources of Bangladesh Bank, the banking sector regulatory body has reined in the import of goods on April 11, 2022 to deal with inflation, keep the dollar market stable and prevent the decline of foreign exchange reserves. Later on July 4, Bangladesh Bank ordered to preserve LC's 100% cash margin for imports of motor cars (sedan cars, SUVs, MPVs), electrical and electronics home appliances, gold and gold ornaments, precious metals, pearls and ready-made garments in order to keep the country's currency and credit management more integrated. In spite of such strictness, record numbers of cars were imported in the financial year 2021-22.
Sources said that 34 thousand 721 cars were imported in the country in the financial year 2021-22. Of those, 20 thousand 808 cars were imported through Mongla port and 13 thousand 913 cars through Chittagong Port.
Meanwhile, in the fiscal year 2020-21, 27 thousand 922 cars were imported in the country. Out of this, 14 thousand 474 cars came through Mongla port. Apart from this, 13 thousand 448 cars were imported through Chittagong port. In the fiscal year 2019-20, 17 thousand 93 vehicles arrived in the country.
Concerned persons opined that the reserve crisis may increase as the import of luxury cars increases despite the dollar crisis.
It is known that the import of cars continues in the fiscal year 2022-23. As car prices in Japan fell due to the global crisis, importers are bringing cars without complying with the government regulations. However, entrepreneurs are facing difficulties in importing daily necessities.
According to NBR sources, 650 cars were imported without LC in the month of November only in the fiscal year 2022-23. Importers HNS Automobiles, Moriam Enterprises, GM Trading, SSRA Enterprises and Nagoha Corporation imported 934 vehicles on November 10 and 22 by vessels Lotus Leader and Malaysia Star.
Out of the imported vehicles, 585 were imported through consignment. Of those, 284 have been imported as per import-export policy but remaining 301 consignments did not have LC. Against these 301 shipments, 650 vehicles have arrived. Now complications have arisen with the tolling process of vehicle shipment without LC. The LC and non-LC cars have been kept in Chittagong car shed.
According to the Import-Export Act-1950, the product must be imported opening LC or letter of credit with an authorised commercial bank mentioning the Product Identification Code (HS).
According to the Import General Manifesto (IGM), the goods are shipped from the exporter's country and unloaded at the importer's port if the goods description is correct. In the case of importing any product, the 'Country of Origin' must be clearly mentioned on the product, product packaging and container. Due process was not followed in case of importing 650 cars.
The concerned persons said even cars were imported without LC before in some cases but there was no dollar crisis in the country at that time. No complication was raised then as the importers have cleared the vehicle by completing the LC in the way of importation of the vehicle. But now, it was not possible to open the LC even though the car import was completed due to the dollar crisis, which caused complications. The importers of those cars said that they are trying to open LCs now.
According to the sources of the National Board of Revenue, Shahidul Islam, the owner of the car importing company HNS Automobiles, imported most of the those cars without LC. Among the 934 cars imported on November 10 and 22, 25 reconditioned cars came in the name of his company. More 19, 12, 10 and 10 vehicles have arrived in the name of Maryam Enterprises, GM Trading, MSRA Enterprises and Nagoya Corporation respectively. The rest of the cars came in the names of different other companies.
An official of NBR, who did not want to be named, said that even if the vehicles come without LC, there is no chance of illegal payment. If the money is being paid through hundi, the importers will not get any valid documents to release the vehicle.
He said cars without LCs seem to have been imported in the hope of higher profits as car prices fell due to the global recession.
When asked, Research Director of Center for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem said there is a dollar crisis in the country. Keeping this in mind, some unnecessary or less necessary import control should be taken as a temporary measure. It should be for the purpose of creating an import alternative market.
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