Customs duty on black cabs reduced to 20 percent

ISLAMABAD (August 27 2006): The Central Board of Revenue (CBR) has reduced customs duty, to 20 percent, on import of the much-talked about 'Black Cabs' in Combined Built Unit (CBU) condition, to be imported by Prime Transport Limited (PTL), a Karachi based company, official sources told press.

President Pervez Musharraf and Prime Minister Shaukat Aziz had allowed import of 300 black cabs on the analogy of tractors, subject to payment of customs duty at the same rate as for CKD and CBU, for taxi operation only. But, the company did not apply within the stipulated time as was advertised by the Ministry of Industries and Production in the press.

The Chief Executive of PTL, Dawood Khan, in a letter to the federal government on July 31, 2006, had sought exemption from taxes and duties, besides Engineering Development Board's deletion programme for setting up Black Cab assembling plant, sources said.

The company has been apprised that CBR has reduced customs duty to 20 percent on CBU condition, it (CBR) has been asked to notify rate of 5 percent for CKD kits to be imported for the manufacturing of Black Cabs.

The company had also sought No-Objection Certificate (NoC) to establish cabs manufacturing plant without fulfilling the preconditions, required to be met by the sponsors, for setting up of such kind of projects.

According to the prescribed criteria, the intending companies are required to provide proof of land acquisition, technical agreement with the foreign firm, manufacturing of such purpose built vehicles for joint ventures, annual production capacity and after sale service plans. The specifications set by the government, according to which locally manufactured Black Cabs must be built on a chassis designed for taxicab and would not be allowed to be converted into a private or personal car.

It may be mentioned here that the government has already replaced deletion programme with Tariff-Based System from the current fiscal year and the company was probably unaware of the new system, sources added.

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