KARACHI: The decision of the Economic Coordination Committee of the Cabinet (ECC) to release the 900 cars stuck up at the Karachi Port after paying the penalty is, according to importers, not at all feasible.
All Pakistan Motor Dealers Association (APMDA) Chairman H M Shahzad said, “We are pleased with the ECC for addressing the issue that was pending for the last four months but the decision of the ECC has not brought any relief for the dealers.”
He said the penalty translates into 100 percent to 116 percent additional payment depending on the displacement of the vehicle. A 1000cc car’s penalty is 100 percent, above 1000cc till 1800cc is 108 percent and above 1800cc is 116 percent. He said with the ECC’s penalties a car, which costs Rs 1.0 million in the local market after paying the import duty, will cost us Rs 2.0 million to Rs 2.2 million, he reasoned.
He said that cars, which were stuck up at the Karachi Port from February till September 2013 (eight months) should have a one-time penalty of 10 percent and the cars from October 2013 to January 2014 a one-time penalty of 20 percent.
However, ECC has announced 10 percent per month penalty for the eight months, while one time 20 percent for four months. He urged the government that the heavy penalties that have been put on the used cars should be withdrawn so that the dealers could contribute sufficient revenues to the national kitty, but if the penalties were not reversed the government could not fetch anything. He said that how can the owners of stuck up cars take out their investment when the cost of the cars has exceeded a lot from the existing market rates after the penalties.
If the government stays the decision then no one will go for releasing of their vehicles due to higher penalties, so, the government will have to conduct an auction, he added. However, the auction will never pay the regime as per its expectations, even the government cannot get duties from the auction instead of penalties, he added.
For good omen of the consumers and the industry the government should revise the higher penalties regime and allow release of held up cars on one time basis against a lump sum surcharge of 10 percent as these cars are shipped prior to unexpected change of regular practice by the customs authorities, said Shahzad.
He said that the government is already incurring heavy demurrage day by day that is causing unnecessary financial losses to the importers who have brought these from their hard earned money. It is beyond the comprehension that when the customs authorities have already cleared 2009 model cars regularly against the surcharge as per Office Memorandum No 04(06)/2010-Imp-II(Part-X) dated February 25, 2013 issued by the Ministry of Commerce after condoning the excess age up to eight months then why have they stopped such cars, added the auto association leader.
Shahzad further said that the surcharges calculated as per new criteria by the authorities are not feasible for the importer for the payment. Keeping in view that around 90 percent of these stuck up cars are below 1000cc that will cover the sheer demand of small segment cars in the country due to unavailability of local ones, the matter should be resolved on urgent basis.
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