The Central Board of Revenue (CBR) on Tuesday revised its Customs General Order (CGO) No 6, which had brought it under criticism for its allegedly partisan attitude towards selected brands of car manufacturers. It issued the amendment broadly classifying cars into five categories for duties and taxes in Pak rupee and dollars terms.
The new order has brought an end to all controversy that had embarrassed the CBR and rationalised rates and duties on the import of cars.
The CBR issued CGO No. 10 of 2004 to clarify payment of duties and taxes in Pak rupees on import of vehicles.
"The order has been issued to facilitate the importers of vehicles and to mitigate the discretionary powers of customs functionaries," the CBR circular said.
This order is made effective from July 9, 2004 in suppression of CGO No. 6 dated July 9, 2004.
Local automobile vendors have welcomed the decision of the CBR and expressed the hope that this amendment would minimise the black money being charged in the car market and bring down prices of new cars.
All Pakistan Motor Dealers Association (APMDA) chairman H.M. Shahzad has said that it was the personal interest of President General Pervez Musharraf, Prime Minister Shaukat Aziz and CBR chairman Abdullah Yusuf that CGO No.6 had been amended in accordance with the wishes of motor dealers'' association.
The APMDA has also demanded of the CBR to refund excess payment importers might have paid to clear their consignments during the intervening period from July 9 to August 31, 2004.
The amount of customs duties, sales tax, withholding tax and CVT as worked out on current rates and payable by the importers of the vehicles shall correspond to the prescribed rates (See table).
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Vehicle Existing duty Duty and taxes in US $
Or Equivalent amount
in Pak rupees
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Up to 800 cc 50% as val. 4000
From 801 cc to 1000 cc 50% ad val. 5000
From 1001cc to 1300 cc 50% ad val. 10,000
From 1301cc to 1600cc 70% ad val. 18,000
From 1601cc to 1800cc 80% ad val. 22,000
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The amount of customs duties, sales tax, withholding tax and CVT on vehicles above 1800cc shall be worked out as under:
1) The FOB value certified by the manufacturers or his authorised local agent for a particular vehicle at the time of its manufacture shall be accepted.
ii) In case the vehicle is of domestic model and the FOB value is not provided by the manufacturer, the FOB value certified by the manufacturer or his authorised agent for export model may be inflated as per prevalent practice.
iii) The local agent commission and other charges, if any, shall be added in the ascertained FOB value if not already included in the price certified by the manufacturer or his authorised local agent.
iv) Landing charges @ 1 percent of the sum total of CIF value shall be added to arrive at the assessable value.
v) Actual amount of insurance from country of manufacture or first registration shall be added in the ascertained value. In case of non-availability of insurance memo for any reason, insurance amount as per existing practice shall be included in the FOB value.
vi) The actual amount of ocean/air fright as was calculated from the country of original manufacture shall be added for the purpose of ascertaining the CIF value of the imported vehicle.
vii) Customs duties and taxes shall be worked out on the basis of prescribed rates at the time of filing of the goods declaration (GD).
viii) The value of optional/additional accessories shall be included in the value of the vehicle and shall be subject to the rate of duty applicable to the vehicle in which the accessories are fixed.
The order said that the depreciation in duties and taxes shall be allowed on the import of used/second-hand vehicles at the rate of 1 percent for vehicles up to 1800cc for each completed month calculated from the date of first registration abroad up to the date of entry into Pakistan subject to the maximum of 50 percent.
Whereas in the case of vehicles above 1800cc the depreciation shall be allowed at the rate of 2 percent per month subject to a maximum of 50 percent.
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