ISLAMABAD: The Federal Board of Revenue (FBR) has requested the government to approve an amnesty scheme for the clearance of over 1,000 refurbished cars stuck at the Karachi port after change in the import policy.
An FBR summary has been sent to the government for approval in this regard.
As per the summary, car importers for expatriate Pakistanis need a one-time permission for payment of duties and taxes through their bank accounts for clearance of 1,035 vehicles stuck at the port.
On the other side, the conflict between the FBR and the Ministry of Trade and Commerce over change in import policy for refurbished vehicles has intensified as the former had opposed the move.
The FBR has also forwarded a copy of its summary to the federal commerce secretary. As per the information available with Express, the summary states that SRO I)52)/2019 of the Import Policy Order 2016 was amended in January this year by the commerce ministry without addressing the reservations of the FBR.
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The amendment was regarding refurbished vehicles under residence, personal package and gift schemes for the expatriate Pakistanis. As per the amendment, clearance for refurbished vehicles will be made after payment of their duties and taxes by importers through their foreign bank accounts in the country or through the bank accounts of their family members residing in the country.
After release of the said SRO, the summary stated that the clearance of used vehicles was halted at the ports.
The Karachi Port Trust alone has 1,035 imported vehicles. In order to dispose of the vehicles, the FBR initiated an auction process under Customs Act 1969, which was supposed to be held in April and May 2019.
However, several vehicle importers challenged the move in the Sindh High Court (SHC). The SHC issued a stay order after which the auction process was halted.
The commerce ministry’s step had put immense pressure on foreign reserves due to increased imports of CKD and SKD kits by local car assemblers while the revenue had also been adversely affected.
The federal government was empowered to make amendments in the import policy but given the unnecessary measure and stuck up vehicles at the ports and the resultant financial impact on the FBR, the summary recommended that the commerce ministry withdraw the condition imposed on import and clearance of refurbished vehicles and allow a one-time relaxation for payment of taxes on duties by importers through their bank accounts.
“The measure will not only bring necessary foreign exchange to Pakistan but also facilitate overseas Pakistanis,” stated the summary. “The waiver will also contribute to an immense revenue for FBR and the government treasure.”
There was also a warning in the summary that if the waiver was not granted, FBR would have to face a lot of loss in the shape of litigation costs as well as fall in revenue. Lengthy court proceedings, the recommendation hinted, would also bring about severe losses to the vehicles stuck at the ports.
(This news/article originally appeared in The Express Tribune on June 10th, 2019)