Levies on expatriates'' vehicles import: SRO issued in support of CGO 10/2004

The Central Board of Revenue (CBR) has announced that exemption of custom duty, sales tax, withholding tax and capital value tax (CVT) would be available in excess of the cumulative duties and taxes declared for five categories of old and used vehicles imported by overseas Pakistanis under customs general order (CGO) 10 of 2004.
The government has empowered the CBR to exempt duties and taxes in excess of the cumulative amount declared in US dollars for five slabs of vehicles based on engine capacity, through an SRO(I)/2004 issued here on Saturday.
According to the notification, "the government will exempt old and used automotive vehicles (falling under PCT heading 87.03 of the First Schedule of the customs Act, 1969) on the imports from so much of the customs duty, sales tax, withholding tax and CVT as are in excess of the following laid down cumulative amounts:
Vehicles up to 800 cc, the duties and taxes would be $ 4000 or equivalent amount in Pak rupees.
Vehicles from 801 cc to 1000 cc, the duties and taxes would be $ 5,000 or equivalent amount in Pak rupees.
Vehicles from 1001 cc to 1300 cc, the duties and taxes would be US$ 10,000 or equivalent amount in Pak rupees.
Vehicles from 1301 cc to 1600 cc, the duties and taxes would be US$ 18,000 or equivalent amount in Pak rupees.
Vehicles from 1601 cc to 1800 cc, the duties and taxes would be US$ 22,000 or equivalent amount in Pak rupees.
The notification has specified that the depreciation in the duties and taxes @ 1 percent per month in payable amount as per cumulative scales mentioned above shall be allowed subject to the maximum of 50 percent as per CGO 10 of 2004.
Official sources said that the SRO has been issued after approval of the summary of CBR by the ECC of the Cabinet suggesting that the fixed scale of cumulative levy for old and used vehicles up to 1800 cc in CGO be notified through an SRO with retrospective effect.
The CBR has fixed a consolidated amount of duties and taxes on the import of vehicles in US dollars, to be paid by the importers in Pak rupees. However, if the custom duty, sales tax, withholding tax and capital value tax (CVT) are being calculated on the basis of statutory rate, the rate of duties and taxes is more in case of certain make of vehicles as compared to the rate fixed in the CGO. Legally, the customs general order could not grant exemption under the Customs Act. For this purpose, SRO has been issued which enabled the tax authorities to give exemption in excess of the accumulative duties and taxes, officials maintained.
The issuance of SRO has given legal cover to the customs general order (CGO) 10 of 2004 for charging accumulative amount of duties/taxes on the import of used and old vehicles by the overseas Pakistanis.
Moreover, the concerned department could not raise audit objection after issuance of notification, they added.
Following is the text of the notification issued on Saturday: In exercise of the powers conferred by section 19 of the Customs Act. 1969 (IV of 1969). clause (a) of sub-section (2) of section 13 of the Sales Tax Act, 1990, sections 148 and 53 read with Second Schedule of the income Tax Ordinance, 2001 (XLIX of 2001) and sub-section (10) of section 7 of the Finance Act. 1989, the Federal Government is pleased to exempt old and used automotive vehicles specified in column (2) of the Table below, falling under PCT heading 87.03 of the First Schedule of the customs Act, 1969 (IV of 1969), on the imports from so much of the customs duty, sales tax, withholding tax and CVT as are in excess of the cumulative amount specified in column (3) thereof.
TABLE

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S.No.    Vehicles         Duty and taxes

        meant for   in US$ or equivalent

        Transport  amount in Pak rupees.

       of persons.

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(1)         (2)                 (3)

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1.    Up to 800 CC              US$ 4000

2.    From 801cc to 1000CC      US$ 5000

3.    From 1001cc to 1300 CC   US$ 10000

4.    From 1301cc to 1600 CC   US$ 18000

5.    From 1601cc to 1800 CC   US$ 22000

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