Twenty three criminal and five civil cases involving 28 individuals, including two customs inspectors, were filed before the Phuentsholing dungkhag court on June 5 by the Office of the Attorney General (OAG) for tax evasion and business fronting at the country’s commercial hub.
Of the 23 accused for tax evasion, Birender Kumar Gupta of Ram Prit Sha Grocery store in Phuentsholing has the maximum charges of evading sales tax and customs duty for goods imported from third countries. The OAG charged Birender Gupta Kumar, non-Bhutanese, with five counts of tax evasion.
He used five Bhutanese trade licenses, including the trade license of KCD & Sons Tshongkhang belonging to the former Phuentsholing thrompon, Tsheten Dorji, to import goods worth Nu 9.769 million (M) from third countries between 2008 and 2010.
According to the OAG, Birender Gupta had imported goods worth Nu 9.796M by using five Bhutanese trade licenses but had declared the consignment worth of Nu 4.562M only at the Regional Revenue and Customs office (RRCO) in Phuentsholing.
The Anti-Corruption Commission (ACC) team while investigating the case found a diary that Birender Gupta had maintained where he had recorded all transactions. The diary revealed that he had remitted Nu 45.120M between 2008 and 2010 to third countries like Thailand, China, Singapore and Malaysia.
Birender Gupta imported goods by using hired Bhutanese trade licenses of Gaki Tshongkhang, Trade Asia, Chencho Zangmo Import House, KCD & Sons and Gongphyel Tshongkhang.
He imported goods worth Nu 2.230M from Thailand in the name of Gaki, who was alleged to have received Nu 75,000 as commission. In Chencho Zangmo’s name, he imported goods worth Nu 0.594M from China and paid her Nu 25,000 as commission. For the Nu 2.176 M worth of goods imported from Thailand using Trade Asia’s license, he had paid a commission of Nu 75,000.
Birender Gupta was also charged for not declaring goods worth Nu 1.050M to evade tax although he had remitted Nu 2.739M to third countries by using KCD & Sons’ trade license and paid Nu 20,000 as commission.
The investigation revealed that license of KCD & Sons was leased to Kumar Pradhan, who is also a non-Bhutanese, who then allowed Birender Gupta to import goods in 2009. Kumar Pradhan used the trade license even when Tsheten Dorji had contested and won the post of Phuenthsoling Thrompon in the 2011 Thromde election.
Despite owning a business license, Tsheten Dorji had submitted false information in the nomination paper on December 27, 2010 for the Thrompon election and submitted false information to the Chukha dzongkhag court. ACC recommended the OAG to charge former Thrompon on two counts of deceptive practices.
Birender Gupta also imported goods worth Nu 1.416M from Singapore, Malaysia and China by using the licenses of Gongphyel Tshongkhang.
The state prosecutor submitted the court to restitute Nu 17.587 from Birender Kuamr Gupta for evading the indirect tax and non-declaration, mis-declaration or concealment of goods. He is liable to pay 24 percent per annum for evading tax, 10 percent of BST, 30 percent customs duty and a fine of 50 percent.
ACC detained Birender Kumar Gupta from December 23 to 28, 2015 and released him on bail by depositing a bond amount of more than Nu 3.372M to the commission.
Birender Kumar Gupta, who is from Bihar, has been doing business in Bhutan since 1972 using the license of Ram Prit Sha registered in his father’s name. He had taken over Ram Prit Sha grocery from his father since 1990. According to Rules and Procedure for import from third countries, non-Bhutanese who hold valid trade license in Bhutan are not eligible to get import house registration other than a Bhutanese national.
OAG prosecutor also filed a civil suit against five trade license holders of Gaki Tshongkhang, Trade Asia, Chencho Zangmo Import House, KCD & Sons and Gongphyel Tshongkhang, to revoke their trade licenses and impose a fine of Nu 10,000 each for breaching the undertaking signed by the license holders while obtaining the trade licenses. The defendants will also have to refund the commission received from Birender Kumar Gupta.