KARACHI: About 1,000 imported vehicles are stuck at port as Pakistan Customs is yet to clear them since November 2013. The vehicles have been imported under the scheme of personal baggage, gift and transfer of residence and government can collect revenue of about Rs 3 billion by releasing these vehicles.
In February last year, the ministry of commerce through an office order allowed the release of such vehicles that were few months older than the prescribed age limit of 3 years. “Considering the hardship faced by the importers of vehicles under the schemes of personal baggage, gift and transfer of residence, where the imported vehicle is only a few months older than prescribed age limit of 3-year, it has been decided to allow release of such vehicles against a surcharge levied by the customs in whose jurisdiction the vehicles was imported on Cost and Freight (C&F) basis,” said an office memorandum issued on February 25, 2013 by the ministry of commerce.
The delay in shipment of vehicles older than 3 year and 8 months shall be condoned if not in excess of 30 days against a surcharge at 5 percent per fortnight of C&F value, it added. The memorandum also said that the EGM and cargo vessel leaving the port of export may be considered with reference to cut-off date.
Following this memorandum, the customs authorities were releasing the above age limit imported vehicles at minimum surcharge of 5 percent and maximum 13 percent during February to October 2013 and few thousands cars were cleared during the period. However, in November 2013, the customs suddenly stopped clearance of imported vehicles of 2009 model declaring the import of above 3-year vehicles illegal. According to customs authorities, the memorandum was for a specific time period and only for those vehicles shipment of which was delayed after the government’s decision to reduce the age limit. The federal government had reduced the age limit of imported cars from 5 to 3 year in December 2012 aimed to support the domestic automobile industry.
Customs officials claimed that interpretation of that memorandum was incorrect that created a crisis like situation and now vehicles of 2009 model will be released after a new approval from ministry of commerce. Presently, the customs has completely stopped the clearance of imported vehicles of 2009 model and seeking a clarification from the ministry for release of these vehicles, source said.
“We are not sure about the actual units but around 1,000 imported vehicles are stuck at port as customs has refused to clear these vehicles without any new directives from the ministry or Federal Board of Revenue”, they added. Sources said that some Rs 4-5 billion investment of overseas Pakistanis has been blocked due to non-clearance of these vehicles, while the government is also suffering billions of rupees loss on account of revenue.
The cost of these vehicles is also increasing as now the importers will be required to pay millions of rupees demurrages, imposed by the port authorities. These vehicles are lying at ports from last three to four months and importers have to pay approximately Rs 100 million on account of demurrages to the port authorities. Sources said that import of used cars is generating billions of rupees revenue for government as there is some 100 percent duty on import of vehicles. The federal government has collected about Rs 35 billion revenue during the first half of FY 2012-13, when age limit was up to 5-year. While some Rs 12 billion were received on account of import duty during second half of FY 2012-13, as in December 2012 government had reduced the age limit of imported cars up to 3-year.
