Hello,
I have with me documents related to Toyota Corolla X Assista 2006 which was recently imported and sold to a customer here. Price at which it was purchased from Japan was $4000 while it was sold here for Rs. 138000.
I am trying to understand how duty was calculated. It seems sellers here are earning huge profit on sale of vehicle even after duty is applied.
Goods Declaration. GD-1
This is the first document I have with me. It states the following:
Vehicle declared value: $4000
This is the actual vehicle price at which it was purchased from Japan. May be the actual price was different and they are doing some cheating like under invoicing (I don't know how it is done, just heard the term) but this is what we have so let's take it as starting point.
After converting it into Pak Rupees it becomes Rs. 342754 @ 85.6885 dollar rate.
Now the document states some duties and taxes as follows:
CD - Custom Duty @ 60%
RD @ 2.50% (Don't know what RD is so if any member can clarify it)
ST - Sales Tax @ 17%
IT - Income Tax @ 5.75%
Landing Charges @ 1%
They have not written any figure against these duties so as to know there actual value. But at the end of document, some figure are mentioned as follows:
Rs.232668
Rs.105476
Rs.36296
Rs.5444
Rs.9695
Rs.389600
Besides these figures, it states that the exchange rate is 85.10.
Don't know what relation these values have with above percentages. But one thing I found out that the sum of CD + ST + IT is 68.25% and that figure above Rs.232668 is around 65.35% of declared value which is Rs.342754.
Anyway now current vehicle price becomes:
Rs. 342754 + Rs. 389600 = Rs. 732354
Federal Excise Duty Invoice
This is another document I have in which the amount written is Rs.9947.
So now current vehicle price becomes:
Rs. 732354 + Rs. 9947 = Rs. 742301
Receipt of Shipping Company
This document states amount Rs.7255.
So now current vehicle price becomes:
Rs. 742301 + Rs. 7255 = Rs. 749556
Infrastructure Cess
In this document the total amount written is Rs. 3105.
So now current vehicle price becomes:
Rs. 749556 + Rs. 3105 = Rs. 752661
Challan Document
This is some kind of challan document in which only Rs.500 is written.
So now current vehicle price becomes:
Rs. 752661 + Rs. 500 = Rs. 753161
Tax Payment Receipt
This seems like Income Tax document in which the amount written is Rs. 41740
So now current vehicle price becomes:
Rs. 753161 + Rs. 41740 = Rs. 794901
That's it!
There are some other documents too but they do not contain any amount like Export Certificate from Japan, Auction document (I think so) and Purchase certificate with amount $4000 which is already mentioned above e.t.c.
QUESTIONS
Can someone explain how duties were calculated?
Did I include everything or miss something because vehicle was sold here for Rs. 1380000 while it amounts to Rs. 794901 so profit is Rs. 585099???
Or did I miss something like shipping charges or clearing forwarding charges e.t.c which if we suppose are around Rs.300000 then still there is huge profit margin left.
What's RD which I stated above?
Did this car come under "Special Regime" or "Normal Regime"? These are two regimes available according to FBR under which vehicle can be imported.
Thanks