KARACHI: Around 2,000 imported vehicles are denied clearance by Pakistan Customs due to technicality of SRO issued by the Commerce Ministry. The vehicles, manufactured in 2009, were shipped in September 2013 and imported under personal baggage scheme. They are held at the port on the grounds that they have exceeded the age limit of three years.
All Pakistan Motor Dealers Association (APMDA) Chairman HM Shahzad said that earlier the authorities cleared 2009 model cars against the surcharge. He said that these cars have been cleared throughout 2013 but suddenly the customs has stopped clearing since November 2013 and given the reason that they are interpreting the statutory regulatory order wrong and as per the new interpretation they could not clear cars unless the commerce ministry issues a new SRO to clear the confusion.
Importers claimed that they had invested over five billion rupees on around 2,000 cars and it is estimated that the total demurrage would be around Rs100 million. Importers are already suffering from the reduction in the age limit from five to three years. In 2012, over all Rs 35 billion were collected through car imports, which decreased to Rs10 billion in 2013 due to restrictions. Importers said that uncertain government policies were hurting not only the foreign investment but also the local investors in overseas were also avoiding investing due to the inconsistency of the policies.
On the other hand, Pakistan Automobile Manufacturers Assemblers Dealers Association (PAMADA) has appreciated the customs for curbing illegal import of used cars.
“We appreciate the efforts of the customs department, which did not let the used car importers violate rules. It is very encouraging that the customs has stopped the clearance of used imported vehicles which are above the limit allowed by the government for used cars,” said Iqbal Shah, president of PAMADA.
He further added that the local auto industry had time and again requested the government to nab used car importers as they were damaging the national economy and local auto industry by importing used cars through twisting schemes of personal baggage, gift and transfer of residence.
He alleged that used car importers were again trying to blackmail customs by importing over three-year old vehicles, which were not allowed since 15 Dec, 2012.
Last year, customs allowed the clearance of over-aged vehicles against the payment of a small penalty to accommodate those vehicles, which were shipped prior to announcement limiting the age back to three years. So, now unscrupulous traders are trying to deceive customs again by forcing them to clear-over aged vehicles, citing last year examples, Shah said.
Customs should take strict action against those importers as to why they have violated the law consciously and should make an example out of them so that no one else should violate law in future, he said.
If customs allows the clearance this time as well, it will set a very wrong precedence and in future everyone will try to force customs to clear things, which are prohibited, citing precedence.
“Import of used cars is also inflicting a huge damage to both the local auto industry and the economy on different accounts. Therefore, we reiterate our support to this initiative of customs to have a strong check on the irregularities of used car importers,” he added.
PAMADA alleged that “according to the estimates, the government has lost Rs16.5 billion due to import of used cars in the year 2012 alone. ‘SRO 577 valuation needs revision as the values fixed by customs are over 200 percent lower than the normal import duty causing losses of billions of rupees annually,” said PAMADA president.
Rubbishing the claims of used cars importers about contribution to national economy, Shah said used cars contribute almost 50 percent less than a similar new car made in Pakistan in terms of taxes and duties, while their contribution in terms of employment is negligible as opposed to the local auto and allied industries, which employ around 1.5 million people.