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Duty and taxes assessment procedure being revised: vehicle freight rates fixed in dollars

ISLAMABAD (January 07 2004): The government has decided to revise the procedure for calculation of custom duty, sales tax and withholding tax on imported vehicles, sources told Business Recorder here on Tuesday.

The minimum freight rate added to the value of vehicles to assess duties/taxes will be in US dollars instead of Pak rupees, reason being that freight rate in Pak rupee was fixed many years ago and since then this has not been revised despite depreciation of Pak rupee and increase in freight by the shipping lines.

Minimum freight rate for vehicles imported from Japan, Far East and Europe will be assessed under three different slabs.

This rate will be added to the value of vehicles to ascertain cost and freight (C&F) value of vehicle for determining duties and taxes on imported vehicles.

Sources said that custom officials were making assessment of imported vehicles under the procedure given in Customs General Order (CGO) 12/2002.

The new procedure would consolidate past rules, orders and practices to bring uniformity in assessment procedure throughout the country.

Under the proposed amendment in CGO 12/2002, the following minimum freight rates shall be added in the value of vehicle to arrive at C&F value:

Minimum freight rate for the motor cars having engine capacity up to 1000 cc will be $440 for vehicles imported from Japan; $400 Far East; $500 for Europe;

Motor cars having engine capacity over 1000 cc but not exceeding 1300 cc: Japan $600; Far East $525; and Europe $650;

Motor cars having engine capacity over 1300 cc but not exceeding 1600 cc: Japan $675; Far East $600; and Europe $750;

Motor cars having engine capacity over 1600 cc but not exceeding 2000 cc: Japan $725; Far East $675; and Europe $850;

Motor cars having engine capacity exceeding 2000 cc: Japan $825; Far East $775; and Europe $870;

Pickups, vans: Japan $650; Far East $825; and Europe $1000;

Jeeps: Japan $1160; Far East $1000; and Europe $1200;

Coasters: Japan $2400; Far East $2200; and Europe $2600;

Buses and trucks chassis: Japan $3600; Far East $3300; and Europe $4000;

And minimum freight rate of buses (47-48 seater) imported from Japan will be $5700; Far East $4600; and for buses imported from Europe will be $6700.

However, if the importer submits valid evidence of actual freight the same will be considered for arriving at 'C & F value' after due inquiry and verification from the concerned shipping companies.

Another important change in the assessment procedure of vehicles is that the value of accessories shall be included in the value of the vehicle and will be subject to the rate of duty applicable to the vehicle in which the accessories are fitted.

However, no depreciation will be allowed on the ascertained value of the optional accessories which have been replaced by fixing new accessories.

The provisional assessment of a particular vehicle will only be made under Section 81 of the Customs Act, 1969 if the actual price of a vehicle cannot be ascertained through local agent/authorized dealer, internet, or the brochure of the manufacturer/supplier.

Presently, no addition in value is made because of reconditioning/replacement of parts/modifications.

It is, therefore, proposed that an addition of at least 10 percent may made in the ascertained fob value in case imported vehicles have undergone modification, reconditioning/replacement of parts.

This would be in line with present practice in vogue in case of assessment of reconditioned machinery.

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