Overbilling creeps into border towns

Time and again the Royal Monetary Authority (RMA) has been requesting the public to refrain from dishonoring the INR informal exchange but each time a new problem crops up.

This time, the practice of overbilling for goods is  creeping into border towns.

Overbilling means invoicing in excess of prices or exaggerating the amount of services or goods bought.

The RMA determines the amount of INR needed by informal and small-scale traders like grocery and vegetable vendors among others through the banking channel.

Merchants importing goods can avail advance payment or credit payment. Advance payment could be made fully or partially in accordance to the Performa invoice. For the payment of such goods, the invoice has to be verified by the banks in collaboration with the customs authority.

But now, some Bhutanese are overbilling the goods they import from India so that the banks will lend them extra INR.

About a week back, the customs authority in Phuentsholing came across two such cases: one was on excess invoicing of vegetables and the other was on the declaration of goods but without any goods in sight.

The vegetable invoice showed an amount of Nu 48,180 and the declaration of goods amounted to Nu 72,815.

The customs suspected foul play when the quantity and value of the vegetables failed to match what the bill showed in the former case and the declaring of goods in advance in the latter’s case.

The customs found that the invoices of the two business entities were addressed under the names of Uma Tshongkhong and PM Tshongkhong, both in Gelephu.

According to the Joint Collector of Customs and Excise in Phuentsholing, Pema Wangchen, these people might have resorted to this activity because with Phuentsholing being nearer to Falakatta, Jalpaiguri, the release of INR would be easier, nearer and faster, “otherwise why would they bring in their goods through Phuentsholing and not take it directly to Gelephu”.

Pema Wangchen said Bhutan shared bilateral trade relations with India and essential items like rice, oil, fish and vegetables among others were  non-taxed commodities. This, he said, could be the reason for the people taking advantage of the situation.

However, Pema added the amount increased could be small, about Nu 3,000 to Nu 4,000, but the suppliers on mutual understanding with many of the Bhutanese parties, could make invoices exceeding the actual amount by quite a substantial  margin.

Since the INR crunch started, the Phuentsholing customs has seen four such cases although this practice is not rampant according to the officials. But this could just be starters.

“Earlier we used to see cases on under valuation but now we are seeing cases of over valuation against the declaration of goods,” said Pema Wangchen.

According to sources, there are some people taking advantage of the issuance of bank draft for business; for instance, goods  costing Nu 100,000 show bills up to Nu 200,000.

Although such transactions are being said to be practiced from places like Delhi, Jalpaiguri, Siliguri and Kolkata, it is mostly reported from the last two.

Pema Wangchen added that people involved in such practices should be wary as custom officials will leave no stones unturned in nabbing the culprits.

He said the department has an effective investigative mechanism in place to check this kind of practices.

Meanwhile, the small shopkeepers across the border in Jaigaon have stopped the informal INR exchange after the Jaigaon police issued strict warnings. However, a few individuals are still said to be managing the informal exchange by extending a commission of 15%.

With the other border towns like Gelephu, Samdrup Jongkhar and Samtse having a small volume of trade, only a few stray cases of over valuation have surfaced.

Samdrup Jongkhar saw its first case of over valuation about a week back on the local purchase of rice and vegetables. The amount overbilled by Nu 4,000 was Nu 34,000. The concerned individual was fined Nu 17,000, 50% of the stated amount as per the customs’ rules and regulations.

Speaking on overvaluation, the Joint Collector of Samdrup Jongkhar’s regional office, Sonam Dorji said such activities existed but on a small scale.

“If the rupee chain supply is not solved than there are chances of people resorting to more such activities in the future,” said Sonam Dorji.

After the RMA’s announcement on the rupee shortage, the Samtse customs office came across two cases of overbilling, both cases on the import of CGI sheets. The total amount  for  both the cases was about Nu 30,000 exceeding the original amount by about Nu 3,000.

According to one of the Samtse’s customs ficials, owing to limited economic activity in the town, such cases were insignificant.

About two weeks back in Gelephu, a person was found attempting to take back his goods (snacks) which were overvalued by Nu 3,000.

Three weeks back a person was charged for over valuing two refrigerators by Nu 16,000.

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