Guys, Came across breaking news today. Can someone please explain in plain english what this means for imports now?
Daily Times - Leading News Resource of Pakistan
Import of used cars up to 5-years-old
FBR enhances depreciation duty to 60%
[I]* Board issues notification in this regard
- Increase in depreciation rate to benefit overseas Pakistanis
By Sajid Chaudhry[/I]
ISLAMABAD: In accordance with the Economic Coordination Committee (ECC) of the Cabinet’s decision, the Federal Board of Revenue (FBR) on Tuesday enhanced the depreciation rate on import of used cars up to five-year-old from 50 percent to a maximum 60 percent, however, depreciation rate for import of other old and used vehicles will remain at the same level of 50 percent.
The increase in the rate of depreciation up to 60 percent on import of used cars up to five-year-old would reduce the incidence of taxes and duties notified and greatly benefit the overseas Pakistanis intending to import cars under transfer of residence, gift and personal baggage schemes.
In this regard, the FBR has issued a SRO 275 (i) 2011 that amendment has been incorporated in the notification number 755 (i) 2005 whereby the rate of depreciation has been increased from a maximum of 50 percent to 60 percent only for cars.
The SRO 577 (i) 2005 explains the assessment of taxes and duties on the import of used cars up to five-year-old with 1.0 percent depreciation rate per month. Customs duties and taxes shall be worked out on the basis of prescribed rates at the time of filing of the goods declaration (GD) except for old and used vehicles for which a cumulative amount of all livable duties and taxes has been notified in the gazette.
The applicable rates of the livable taxes and duties on import of cars of Asian makes up to 800cc cars $4,400, from 801cc to 1000cc $5,500, from 1001cc to 1300cc $11,000, from 1301cc to 1500cc $15,400, from 1501cc to 1600cc $18,700 and from 1601cc to 1800cc excluding jeeps $23,100. The said amount of taxes and duties could be paid in United States dollars or equivalent in rupees.
Customs General Order No 14 of 2005, which explains the procedure for the assessment of taxes and duties on the import of old and used cars states that the following procedure would be applicable for assessment of motor vehicles in order to ensure its uniform application at all Customs stations throughout the country.
The Freight on Board (FOB) value of a motor vehicle at the time of its manufacture, as certified by the manufacturers or their authorised local agents shall be accepted.
In case of domestic models, for which the FOB values are not provided by the manufacturers, the FOB values certified by the manufacturers or their authorised agents in case of export models of similar vehicles shall be loaded by 5.0 percent on the Cost and Freight (C&F) value.
The local agent’s commission and other incidental charges, if any, shall be added to the so ascertained FOB value, if not already included in the price certified by the manufacturers or their authorised local agents.
The actual amount of ocean/air freight as calculated from the country of original manufacture shall be added for the purpose of arriving at the C&F value of the imported vehicle.
Actual amount of insurance in the country of manufacture or first registration shall also be added in order to arrive at the C&F value. However, in case of non-availability of insurance memo for any reason, an amount equivalent to 1.0 percent of C&F value shall be included.
Landing charges at 1.0 percent of the sum total of C&F value shall be added to the price in order to arrive at the assessable value. The value of optional or additional accessories shall also be included in the assessable value of the vehicle, which shall be subjected to the rate of duty and taxes applicable to the vehicle in which the accessories are fitted.
Depreciation in the assessable value, for the purpose of assessment shall be allowed on the import of used or second hand motor vehicles at the rate of 2.0 percent per month for each completed month, calculated from the date of first registration abroad up to the date of entry into Pakistan, subject to a maximum of 50 percent.
