ISLAMABAD: The Federal Cabinet has refused to exempt stuck vintage cars imported by elite from applicable Import Policy Order (IPO) despite pressure from influential politicians, well-informed sources told Business Recorder.

Sharing details, sources said the Commerce Ministry apprised the Federal Cabinet on December 10, 2024 that it had earlier submitted a summary before the Cabinet on July 25, 2023 on the directions of the Cabinet Committee for relaxation of import/export related conditions/prohibitions, constituted on October 11, October 2022 to allow one-time release of all vintage cars that are stuck at various ports subject to payment of duties as provided under the FBR’s SRO 833(1)/2018, with an additional surcharge at the rate of 10% of the applicable duties. However, this proposal was not approved by the Federal Cabinet on August 9, 2023.

The Cabinet was further apprised that the High Court of Sindh in its order of November 13, 2024, in Constitutional Petition No. D-7029/2021 titled Salman Talibuddin Vs Federation of Pakistan and Constitutional Petition No. D-452/2022 titled Muhammad Ali Vs Federation of Pakistan, directed the Cabinet Division to place the matter afresh before the Federal Cabinet to deliberate on allowing import of vintage cars on a one-time basis and to pass a “speaking order” with reasons within three weeks.

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This issue had also been discussed at the Senate Standing Committee on Commerce, wherein Senator Saleem Mandviwalla pressed Commerce Ministry to again move the summary to the Cabinet.

Explicating the background of the case, the Ministry of Commerce apprised the Cabinet that a summary proposing to allow import of vintage cars was placed by the Ministry of Commerce before the Cabinet in May 2018. However, since the requisite SRO had not been vetted by Law and Justice Division, the Ministry of Commerce was directed to place the summary before the next elected government.

In the meanwhile, however, the FBR issued SRO 833(1)/2018 on July 03, 2018 whereby a cumulative duty of USD 5000/per unit was specified for import of a vintage or classic car. This proposal, has, however, never come into effect because of the prohibition on import of vintage cars in the extent Import Policy Order (IPO) of the Commerce Ministry.

In January 2019, the Ministry of Commerce moved a summary for the ECC proposing an amendment in the IPO to allow the import of vintage cars.

However, the proposal of the Ministry of Commerce was not approved. Importers of vintage cars approached various High Courts for the release of their cars on the basis of SRO 883(1)/2018. While some courts ordered release, a larger bench of the High Court of Sindh directed that the Federal Cabinet may consider these petitions as applications for grant of a ’one-time relaxation.

Commerce Ministry further stated that SRO 833(1)/2018 of July 03, 2018 was rescinded on March 07, 2022. Thereafter, the High Court of Sindh, in its order of April 03, 2023 had directed Ministry of Commerce to place the matter before the Cabinet afresh to decide through a speaking order in view of the judgment of October 27, 2021 and April 03.04.2023.

Accordingly, the matter was placed before the Cabinet Committee for Relaxation of Import/Export related Conditions/Prohibitions on July 20, 2023, which the Committee directed to place the matter before the Federal Cabinet with following recommendations:

(i) a decision in principle may be made to allow one-time import clearance of all vintage cars imported between July 3,2018 and March 7, 2022 (when SRO 833/2018 was rescinded vide SRO 400(1)/2022 of March 07, 2022); and

(ii) one-time import of these cars may be allowed subject to payment of duties as provided under SRO 833/2018 with an additional surcharge at the rate of 10% of the applicable duties.

In the ensuing deliberations on the proposals presented by the Ministry of Commerce, the Cabinet carefully considered the observations and directions of the High Court of Sindh contained in the judgments of October27, 2021, April 3, 2023 and November 13, 2024, in particular as contained in judgement of October 27, 2021 and April 3, 2023.

The Cabinet also considered the apparent anomaly that had been created by FBR’s SRO 833(1)/2018vis-à-vis the prohibition on import of vintage cars under the IPO. Following the detailed discussion on the case, the Cabinet observed that while it accorded the highest respect for the directions of the High Court of Sindh, it was of the collective view that a one-time import clearance of all vintage cars, as proposed by the Ministry of Commerce, could not be allowed for the following reasons:

(i) SRO 833(1)/2018 of July 3, 2018 issued by the FBR only specified the duties and taxes that were to be charged in the case of vintage cars if and when such cars were permitted to be imported;

(ii) whether any item is allowed to be imported or not lies in the domain of the Import Policy Order whereby the permissibility of the import of any item is clearly specified;

(iii) as such, a simple specification of a duty or tax on an import item in FBR’s SROs does not automatically imply the permissibility for the importation of such item; and

(iv) the vintage cars in question were imported in violation of the prohibition on their importation in the extant IPO, and the mere fact that they had been imported does not confer right on their importers to be granted ex-post facto permission for any legitimacy for condonation of violation.

The Cabinet also appreciated the decision of the High Court of Sindh in having afforded another opportunity to the Cabinet to deliberate on the matter.

After detailed discussion submitted for the reasons recorded in the minutes, did not approve the proposal in the summary.

Copyright Business Recorder, 2024