ISLAMABAD: The government is contemplating a reversal of Economic Coordination Committee’s (ECC) decision to lift moratorium on import of three-year old used cars, sources in the commerce ministry told.
ECC had in its meeting on 6th October 2017 deliberated on a summary relating to import rationalization and took a decision that all vehicles new/used condition to be imported under personal baggage, transfer of residence and gift scheme would require duties and taxes to be paid in foreign exchange by Pakistani citizens themselves or local recipient having authorized bank encashment certificate highlighting conversion of foreign remittance to local currency, reported Business Recorder.
Vehicles shipped under personal baggage, transfer of residence and gift scheme are done on an individual basis and hence overseas Pakistani citizens aren’t apprised of the revisions on any frequent policy changes.
Due to the passing of SRO 1067 (1) 2017 in mid-October last year, a major number of shipments sent by overseas Pakistani’s have been languishing at the ports. In this regard, advisor to Prime Minister on Finance, Revenue and Economic Affairs Dr. Miftah Ismail had advised to resolve this problem and finish the headache of individuals who have already imported the vehicles.
The commerce division shared due to lack of coordination between State Bank of Pakistan (SBP) and Federal Board of Revenue regarding procedure for payment of duty/tax on vehicle imports, the policy was finalized on 9th January 2018.
The commerce division suggested those cars whose bill of lading had been issued before January 9th, 2018 should be cleared.
Sources further told, taxes and duties would have to be paid at a higher of inter-bank and open market foreign exchange rates, as per suggestion of Advisor to PM.
Mr. Ismail during course of the discussion highlighted all taxes and duties on import of new or used vehicles would be borne by Pakistani citizens themselves in foreign exchange.
He added immediate application of ECC’s decision regarding new system of paying duties and taxes on import of vehicles could create issues especially for importers whose vehicles had already landed and were now languishing at the ports.
To alleviate the problems of such importers, Mr. Ismail proposed the new rules for import of used and new vehicles via foreign exchange could be implemented which arrive after February 28th, 2018.
On the contrary, Secretary Textile Division emphasized price of locally manufactured cars had risen exorbitantly since ECC’s decision to introduce the new mechanism. He added more than 7000 cars were still stuck at the port.
Secretary, Textile Division pleaded for the early resolution of this problem to reduce problems of these car importers and warned it wouldn’t be advisable to takeback policy immediately after its implementation order from appropriate circles.
ECC after conducting detailed deliberation decided to put the old system in place prior to its decision on summary of commerce division of early-October 2017 taken in its meeting held on October 6th, 2017.
The ECC directed commerce division to undertake discussion on this issue with all stakeholders and prepare a summary with workable suggestions to it for consideration.
And ECC directed the decision may be forwarded to the cabinet for approval.
