The government has allowed release of confiscated, used and second-hand auto parts on payment of 30 percent redemption fine, in addition to leviable duties and taxes. The CBR has amended SRO 574(I)/2005 through a notification issued on Monday.
The Board has also allowed release of the baggage imported in commercial quantity by incoming passengers on payment of 30 percent fine. The on-highway dump-trucks (PCT heading 8704.2000), cleared up to June 30, 2006, may be released on payment of 5 percent redemption fine.
Sources said that the release of these items on payment of fine would facilitate the importers who were unable to clear any of the confiscated goods due to strict customs laws.
The importers have to pay 35 percent customs duty, 15 percent sales tax and 6 percent withholding tax for the release of confiscated second-hand auto parts on payment of 30 percent fine.
Previously, the provisions of Import Policy Order and SRO 574(I)/2005 had clearly specified that second-hand auto parts cannot be released unless cut, pressed, pierced, broken, or otherwise were de-shaped in a manner that the same could not be used in cars. Therefore, the release or sale of second-hand auto parts in their original and serviceable form on payment of redemption fine or through auction was not permitted under the law.
In the past, the collectors were directed that all consignments of second-hand/old/used auto parts should be completely scrapped before release or auctioned to government departments or traders/bidders.
Sources said that it was brought to the notice of Board that the above provisions were widely misused by unscrupulous importers who managed to clear old and used auto parts under the cover of scrap a few years back.
Now, the government has clearly mentioned in the SRO that "auto parts imported in used or second-hand condition" could be released on payment of 30 percent fine. The decision would not encourage import of such parts banned under the Import Policy Order. Serial number 11 of Appendix C of the import policy order has banned the import of second-hand auto parts. Obviously, the importer has to pay duties and taxes for the release of such parts in addition to 30 percent fine. Sources said that the government has also allowed release of baggage imported in commercial quantity after payment of 30 percent fine. The provision has been introduced keeping in view of the new baggage rules (to be notified by the Board).
Previously, the provision was available under the SRO 574(I)/2005, but the confiscated items not covered under the baggage rules were outrightly confiscated, without giving any opportunity to the importer to clear the goods.
Moreover, it was necessary to show the import documents of the goods in commercial quantity brought under the cover of accompanied or unaccompanied baggage. Now, the rules have been simplified and any kind of commercial quantity of goods brought under the baggage rules would be released on 30 percent fine alongwith the applicable duties and taxes.
The CBR has also notified that no option shall be given to pay fine in lieu of confiscation of smuggled goods excluding vehicles with non-tampered chassis frame and auto-parts imported in used or second hand condition, sources added.