KARACHI: Pakistan Customs estimated Rs6 billion in duty and taxes for the clearance of around 10,000 imported cars stuck at the port, officials said on Thursday.
The government had made it mandatory for the car importers to pay duty and taxes in foreign exchange through production of bank certificate for Customs clearance. Officials at Pakistan Customs said the stuck vehicles had increased to around 10,000 after the government decision that importers should ensure the payment of duty and taxes through inward remittances.
The Economic Coordination Committee (ECC) of the cabinet in its meeting on February 7 had reversed its decision, which was approved by the federal cabinet in a meeting held two days ago, and allowed the import of vehicles under the policy that prevailed before October 2017.
Sources said that to implement the decision of the federal cabinet, the Ministry of Commerce would issue an amendment to the Import Policy Order – 2016, which is expected this week or early next week.
Under the Import Policy Order – 2016, commercial import of vehicles in new or used condition is not allowed. However, to facilitate overseas Pakistanis, the government has allowed the import of vehicles under personal baggage, gift, and transfer of residence schemes.
The policy order imposed the condition of arranging payment of duty and taxes through foreign remittances for import and clearance of 1800cc and 4X4 vehicles brought under personal baggage and gift schemes.
However, through a SRO issued October 23, 2017, the Ministry of Commerce amended the policy and made it mandatory to arrange foreign exchange through production of bank certificate for Customs clearance of all types of new and used vehicles brought under both the schemes.
The ministry also amended the policy on December 4, 2017 through a SRO and also made mandatory the requirement for cars imported under transfer of residence scheme.
Owing to frequent changes in the policy, a huge number of cars are stuck at ports.
In the middle of January 2018, Pakistan Customs advised the Ministry of Commerce to allow clearance of those cars that were imported during December 4 to January 9 under old procedure.
Although the ministry allowed the clearance through third party payment, production of bank certificate was kept intact, the sources said.
The ECC in its meeting on February 7 had approved the cars import under the policy prevailed before the issuance of the SRO on October 23, 2017.
Since then, more cars have been imported, but the Customs authorities are awaiting issuance of a SRO by the Ministry of Commerce for clearance.
Faisal Mushtaq, president of the Karachi Customs Agents Association (KCAA), has advised the authorities to waive the demurrages on stuck vehicles, as the government has decided to revert its decision regarding import of cars.
The frequent changes in import policy have resulted in the current situation; he said and suggested the government to adopt a uniform policy and to give sufficient time to importers to comply with the new changes in the laws.