2,700 cars seek clearance under age relief order

KARACHI, Jan 22: Around 1,500 cars up to five years old arrived at the Karachi Port between Dec 8 to 30, 2010, after the governments decision increasing the age limit of used car for imports to five years from three years.

Another vessel carrying 1,200 vehicles of same age will be arriving on Jan 28, Chairman All Pakistan Motor Dealers Association (APMDA), H M Shahzad revealed on Saturday.

He said most of vehicles shipped during the period from Dec 8 to 30 have either landed or coming after Dec 30, 2010, but the customs authorities are not releasing them.

Mr Shahzad said the contention of Customs was that a reference has been made to Federal Board of Revenue for the permission for release of these vehicles earlier because the importers will have to pay heavy demurrage for delay in clearance.

He said the value of 1,500 vehicles comes to Rs4 billion to Rs4.5 billion and the government will get a revenue up to Rs2.5 billion. He also claimed that prior to Dec 8, the number of used cars imported per month was only 300-500.

He said he took up the matter with Finance Minister Abdul Hafeez Shaikh on Saturday regarding delay in clearance of used cars, who assured to resolve the issue.

Meanwhile, the figures of Federal Bureau of Statistics (FBS) revealed that import of motor cars (completely build up unit) has increased to $7.2 million in December, 2010 as compared to $6.13 million in November. The figures did not reveal the number of vehicles imported.

APMDA chairman said that the figures also include brand new cars being imported by the local car assemblers.

In a letter to the finance minister the APMDA chief said millions of Pakistanis were engaged in the trade of cars import, sale, purchase and ancillary trade activities. This trade got a fatal blow when the government increased customs duty and imposed 50 per cent regulatory duty on the importation of used
vehicles in 2008.

The FBR in 2009 amended its CGO according to which deprecia! tion on vehicles was decreased from two to one per cent resulting in increase of value of vehicles to the extent of 25 per cent.

The currency fluctuation and steps taken by the government gave a severe blow to this trade and import of used vehicles drastically fell during last three years
The government policy on imports created the monopoly of the local auto assemblers, who increased the vehicle prices arbitrarily.

Recently, the ministry of commerce provided a partial relief and issued SRO 1113 (I)/ 2010 on Dec 8, 2010 permitting import of used cars of five years old.

The companies engaged in the trade and hundreds of Pakistanis living abroad purchased about 8,000 cars in the light of above cited SRO and invested their
hard-earned billions of rupees in such purchases.

While the vehicles were shipped or were in the process of shipment to Pakistan, ministry of commerce rescinded the said SRO.