The Federal Board of Revenue has decided to simplify procedure to facilitate local disposal or sale of duty-free vehicles, including motor cars imported by privileged persons, organisations, offices, agencies and the dignitaries of the United Arab Emirates (UAE) and Qatar.
Sources told Business Recorder here on Wednesday that the FBR had decided to amend S.R.O.576(1)/2006, dated June 5, 2006 through a new notification which had been cleared by the Law and Justice Division. According to the revised procedure, the FBR has introduced different slabs of reduction in tax liabilities on the disposal of vehicles, depending on the period of import and disposal of vehicle. In this regard, new slabs have been introduced for the disposal of vehicles imported by the privileged persons and the dignitaries of the UAE and Qatar. The reduction in tax liability would be available on the local sale of imported vehicles before and after expiry of five years from the date of importation.
The Board has exempted vehicles from payment of duties and taxes falling under respective headings of Chapter 87 of the Customs Act, 1969, imported into Pakistan free of customs-duty and other taxes by privileged persons and dignitaries of UAE and Qatar listed under Pakistan Customs Tariff (PCT) heading 9905 and subsequently sold or otherwise disposed of in the country.
As per the amended procedure, no such motor vehicle shall be sold or otherwise disposed of in Pakistan before the expiration of one year from the date of its importation, without payment of customs duty and other taxes subject to the following conditions, namely:
If a vehicle is sold or otherwise disposed of before the expiry of one year from the date of importation, whole of customs duty and other taxes would be applicable leviable at the time of import and duties and taxes on value determined in foreign currency at the time of importation.
If a vehicle is sold or otherwise disposed of after the expiry of one year but before expiry of five years from the date of importation, maximum of 60% of reduction of customs duty and taxes shall be leviable at the prevailing rates of exchange and duties and taxes on the value determined in foreign currency at the time of importation.
If a vehicle is sold or otherwise disposed of after the expiry of five years from the date of importation, a maximum of 75% of reduction of customs duty and taxes shall be leviable at the prevailing rates of exchange and duties and taxes on the value determined in foreign currency at the time of importation.
Sources said the amended S.R.O.576(1)/2006 would also include an explanation. For the purposes of this notification the expression/determination of duty and taxes means customs duty and sales tax at the specified rates. No other duties and taxes shall be levied on the disposal of vehicles imported for the purpose prescribed in the exemption order.
The revised procedure added that a vehicle can be surrendered at any time to the concerned Collector of Customs without payment of any customs duty and other taxes for further disposal through public auction. The revised procedure for local sale of imported cars would be issued following a approval by the tax authorities.