The Sunday Leader

DMT Racket Exposed

By Nirmala Kannangara

Adding a new twist to our continuous exposes on corruption taking place at the Department of Motor Traffic (DMT), startling revelations have come to light as to how special purpose vehicles have been registered illegally as dual purpose vehicles by the DMT.

Highly reliable sources from the Department of Motor Traffic and Sri Lanka Customs who wished to remain anonymous blamed the Finance Ministry and Transport Ministry officials of the previous regime for not taking any action to remove the officials in the DMT and Customs Department who worked hand in glove in illegal vehicle importation and registration that deprived the country billions of rupees of income as taxes.

According to the sources, had the highest officials at the Finance Ministry in the former regime took action against the officers at DMT and Customs when government auditors unearthed the frauds, the then Finance Ministry would have collected billions of rupees as customs duty and given the benefit to the people. “When these frauds were uncovered and the Finance Ministry was urged to take quick and stern action against those who were involved in the racket and to recover the losses, the then Government had refused to listen and take action against the malpractices that were taking place. When the government auditors were conducting audits in our respective departments, we furnished them with the necessary documents to unearth the frauds. Once these frauds are uncovered it is up to the Finance Ministry to take action against the fraudsters but not the government auditors,” sources added.


Powerful politicians involved


The sources accused powerful politicians in the previous regime in the vehicle importation racket and added that although these vehicles have been imported with counterfeit documents to evade customs duties with the blessings of the Finance Ministry and DMT officials, the importers have got the vehicles registered as commercial vehicles.

“We are in receipt of the Auditor General’s Department reports that clearly shows how vehicles that have been imported as special purpose vehicles and how they have been registered as dual purpose vehicles by the DMT. According to the Harmonise System (HS), the Customs Department categorises the customs duty on imported vehicles. When imported as special purpose vehicles, the customs duty is much lesser than importing a commercial purpose vehicle,” sources alleged. According to the sources, 540 vehicles imported under 8705 harmonise code between January 2010 and October 2013 which are special purpose vehicles have been registered as commercial purpose vehicles.

“Forty two mobile workshop vans, 45 mobile eye clinic vans, two mobile bathing vans and four mobile lab vans have been registered as dual purpose vans illegitimately. In addition 338 concrete mixer Lorries have been registered as motor Lorries while 89 crane Lorries and 20 crane trucks have been registered as special purpose vehicles and motor Lorries respectively. We do not blame only the DMT officials for these frauds but the Customs officials too are to be blamed. When going through the documents it was revealed that the importers have imported vehicles with forged documents to evade customs duty. When these vehicles reached the port, why did the Customs officials fail to check them to see whether they were really special purpose vehicles or commercial purpose vehicles? Had the customs officials checked these vehicles they could have identified easily that these were not special purpose vehicles but commercial purpose vehicles and have charged the exact customs duty?” sources said. The sources further said when importing vehicles under customs harmonise system code 8705; the customs duty is much lesser when comparing to vehicles imported under harmonize system code 8704.

“Harmonize code 8705 is given to vehicles imported for special purpose vehicles. When a special purpose van (mobile workshop vans, mobile lab vans and mobile eye clinic vans) is imported the customs duty for each van is varied from one hundred thousand to five hundred thousand rupees. When a dual purpose commercial van is imported the customs duty is much higher and it varies from Rs.2 million to Rs.4.4 million. When a special purpose truck is imported the customs duty is around one hundred thousand to three hundred thousand rupees and when a normal truck is imported the customs duty varies from three hundred thousand rupees to Rs.1.5 million. These figures shows how much the country has lost its income because of the Finance Ministry officials in the previous regime allowed the politicians to import commercial vehicles with fraudulent documents to show they were special purpose vehicles and get them registered at the DMT without any restriction,” sources alleged.

The Motor Traffic Department sources said as to how the government auditors wanted the former Commissioner General to de-register all these vehicles that have evaded paying customs duty but to no avail.

“The Auditor General’s Department warned the Commissioner General DMT to take immediate action to de-register these vehicles and prevent them from running on streets. Due to the immense pressure, a few numbers of these illegal vehicles were de-registered but after a few months the ban was lifted. When checked, it was revealed that all these vehicles have been sold now and if new regulations are brought against these illegal vehicles the new owners will have to face the consequences,” sources added.

Although special purpose vehicles have to be registered under series ‘ZA’ category none of these 540 vehicles have been registered under this category but under ‘P’ and ‘L’ categories which are used to register dual purpose vans and motor lorries.

According to the sources, special purpose vehicles cannot transport goods or passengers.

“Although the registration fee for each special purpose vehicle is Rs.20,000 the DMT has charged Rs.15,000 each from 358 vehicles and Rs3,000 from 93 vehicles which have been registered as dual purpose vans and motor lorries respectively. As a result of the DMT’s failure to charge these vehicle owners the exact registration fee for special purpose vehicles the department has lost Rs.6.55 million revenue from 451 vehicles. When calculated the customs duty these vehicle importers have evaded paying, the country has lost billions of rupees further,” sources added.

Meanwhile Customs Department sources accused their own officials for helping politicians to evade custom duties and added that if stern action is not taken against those who were involved in these vehicle importation frauds, the country will further lose billions of rupees.

“Customs Department’s involvement in these vehicle frauds came to light because the government auditors unearthed the vehicle registration racket. Similarly there are many instances where customs officials have helped out politicians and other businessmen to import goods evading duties and to get them cleared without any issues. Unlike the vehicle importation, these cases cannot be traced as even the pertaining documents are destroyed immediately. However, the Auditor General’s Department reports shows how corrupt the Customs Department is and have unearthed lot of malpractices but the failure to take any action against the Customs higher officials over the years has given authority to them to carry on the frauds they were engaged in and the country as a whole has lost billions of its income as the Finance Ministry officials in the previous regime gave the license for them to engage in malpractices. Those who were against these malpractices were subjected to harassment,” sources alleged.

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