Another VAT fraud: coal imports under-invoiced, COPA orders probe

• Rs.187Mn has been undercharged in this manner
• COPA Chair says there are numerous administrative shortcomings
• Discusses introduction of new technology by Customs 

The Committee on Public Accounts (COPA) will initiate a  probe into incidents in which stocks of coal imported for the  Norochcholai thermal power plant have been under-invoiced for the evasion  of due amount of Value Added Tax (VAT) , an official said.  COPA Chairman Lasantha Alagiyawanna told Daily Mirror that  the COPA examined the audit reports of Sri Lanka Customs for 2019, 2020  and 2021. He said the COPA ordered a further probe into this matter.   

“Coal imports have been under-invoiced to avoid VAT payment,” he said.   Asserting that there are numerous administrative shortcomings and irregularities in the process, he said.  Meanwhile, a statement from the parliamentary media unit said as much as Rs.187 million has been undercharged in this manner.   

“COPA drew attention to the financial advantage provided to  the concerned institution by presenting fake local information during  the release of warehouses brought by a private institution for the water  development project in the Eastern Province. Accordingly, during the  release of the goods which the concerned private company had warehoused  as USD 5,139,621, locally prepared forged documents were used to pave the way and obtain USD 1,210,743 in excess for the concerned company when  the value shown was USD 6,350,364. 

 Thus, COPA recommended that a report  in this regard be given within a month. The status of the  introduction of new technology by Customs was also discussed at the  Committee meeting held. Accordingly, the officers who were present  pointed out that currently a system called “ASYCUDA” is being used to  maintain data, and it is connected to the Ramis system. Furthermore, a  new technology system will be introduced in the future. Furthermore,  attention was also directed to the measures taken regarding the  amendment of the Customs Ordinance Act and the officials mentioned that  the amendments in this regard will be submitted to Parliament in January  2024,” the statement said.

• attention was also directed to the measures taken regarding the  amendment of the Customs Ordinance Act