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CBR and car dealers talks collapse

ISLAMABAD (July 30 2004): The talks between the tax authorities and All Pakistan Motor Dealers Association (APMDA) on the issue of payment of duties and taxes in US dollars on the import of cars under customs general order (CGO) 6 of 2004 collapsed here on Thursday.

After a daylong meeting between the CBR and car dealers, Chairman APMDA H.M. Shahzad told Business Recorder on Thursday night that the CBR has refused to amend the CGO on a formula suggested by the association.

The CBR has also turned down their request to restore CGO 12 of 2002 for temporary period so that clearance of already imported cars should be made on the basis of previous procedure.

The car dealers have decided to present their case before the Federal Finance Minister Shaukat Aziz on July 30 (Saturday) in Karachi.

Frequent calls were made to get the version of the CBR men, but no one was available for comments.

Shahzad said that the car dealers were optimistic that the CBR Chairman Abdullah Yusuf and his team would consider their suggestions. With the consent of the CBR, the association worked out a formula along with the new slabs of fixed amount of duties and taxes in US dollars. Contrary to this, tax authorities rejected the suggestions of the association following meeting with the sub-committee on Thursday evening.

The CBR was of the view that the proposals of car dealers were not viable and could not be incorporated in the CGO, he maintained.

The APMDA chairman claimed that the CGO 6 of 2004 was issued in violation of WTO and Finance Act, 2004, which has blocked clearance of vehicles already imported by the overseas Pakistanis in view of duty reduction made in the budget.

The car dealers submitted reduced slabs of custom duty, sales tax, withholding tax and CVT chargeable on imported vehicles in dollars as compared to the rates specified in the CGO 6 of 2004. They argued that all the previous CGOs provide 50 percent depreciation on the import of old cars by the overseas Pakistanis. However, CGO 6 of 2004 is different to that of the custom orders issued in the past.

Shahzad strongly contested that the custom officials representing Karachi Appraisement have submitted wrong calculations to the tax authorities.

He questioned that why the CBR did not issue CGO at the time of budget 2004-2005. The issuance of CGO after a delay of 18 days created serious problems for the people who have already purchased vehicles on the assumption of paying less duties and taxes.

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