NBR officials say laws do not permit such facility
A section of reconditioned car importers has demanded that the National Board of Revenue conduct valuation of around 3,500 cars imported before June this year allowing 45 per cent depreciation adopted in the budget for the current fiscal year.
Before the current fiscal year, depreciation for five-year old reconditioned cars was 35 per cent.
The importers of the used cars applied to the finance ministry and the NBR for the benefit after the approval of the national budget for this fiscal year.
NBR officials, however, said under the existing laws and rules there were no scope to provide such depreciation as the cars were imported before June 2013 and the importers had already submitted bills of entry for the cars.
As per rules, valuation in calculating customs duty is done on the basis of the submission date of bill of entry.
NBR high-ups, however, are examining the issue and will soon send a summery to the finance minister, Abul Maal Abdul Muhith, for his consideration, they said.
Before June 2013, the NBR allowed 35 per cent consolidated depreciation for five-year old cars in calculating customs duty.
The government has adopted a year-based depreciation system and the highest rate of depreciation is set at 45 per cent for 4-5 years old cars, zero per cent for one year old car, 30 per cent for 1-2 years old cars, 35 per cent for 2-3 years old cars and 40 per cent for 3-4 years old cars.
NBR officials said many importers did not release the cars hoping that the government would provide depreciation at higher rate or any other tax benefits.
They applied for the facility for the used cars imported before June after the government increased the rate of depreciation, they said.
If the NBR allows 45 per cent depreciation for the cars which are entitled to get 35 per cent depreciation, the government may lose more than Tk 100 crore in revenues, they said.
Of the cars, around 3,000 are remained stuck at the Mongla port and around 500 at the Chittagong port.
Abdul Haque, managing director of Haq’s Bay Automobiles Ltd, applied for the benefit for his around 900 old cars. A number of other importers also applied for the facility.
‘We did not release the cars due to discriminatory valuation method between old and new cars. Some of us went to court to settle the issue. So the cars remained undelivered,’ he told New Age on Monday.
He said, ‘Before the finalisation of the budget for FY 2013-2014 the finance minister assured us that 45 per cent depreciation would also be available for those cars. But the NBR did not follow the finance minister’s directive.’
The NBR now can provide 45 per cent depreciation for those cars by just amending the statutory regulatory order, he said.
‘If the NBR does not provide the benefit, many of the importers will be undone as people will not buy the cars at higher price,’ he said.
NBR officials, however, said that if the NBR provides the facility by amending the SRO or issuing new SRO, it may also face legal action from the importers who has already released their cars by paying duty under previous valuation system.
NBR member (customs policy) Farid Uddin said some importers applied for the benefit and the NBR was examining it.
‘It is early to comment on the issue,’ he said.
-With New Age input
