3,500 Imported Cars
NBR set to provide depreciation benefit bypassing law
The National Board of Revenue is set to provide 45 per cent depreciation benefits for around 3,500 reconditioned cars imported before June this year though the cars are supposed to get 35 per cent depreciation under the law, officials of the NBR said.
NBR high-ups and mid-level officials, however, differ in their opinions on the allowing of increased depreciation for the cars, they said.
‘The NBR high-ups have already prepared a summery recommending for allowing the depreciation for the cars on the ground of public interest though mid-level officials are opposing the move,’ an NBR official told New Age on Sunday.
He said that the summery along with a draft amendment to the existing statutory regulatory order would be sent very soon to finance minister Abul Maal Abdul Muhith for his consideration.
The mid-level officials opined that importers could not get the increased depreciation on the ground of ‘public interest’ as the imported cars were luxury goods and this was totally a commercial issue.
Earlier in July, a section of reconditioned car importers applied to the NBR and the finance ministry for conducting valuation of around 3,500 cars imported before June this year allowing 45 per cent depreciation adopted in the budget for the current financial year.
Before the current FY, the NBR allowed 35 per cent consolidated depreciation for five-year-old cars in calculating customs duty.
For the current FY, the government has adopted a year-based depreciation system and the highest rate of depreciation is set at 45 per cent for 4–5-year old cars.
Analysing the existing laws and rules, the mid-level officials opined that there was 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 the rules, valuation in calculating customs duty is done on the basis of the submission date of bill of entry.
If the NBR provides the facility by amending the SRO or issuing new SRO, it may also face legal action from the importers who have already released their cars by paying duty under previous valuation system, they opined.
But NBR chairman Ghulam Hussain and member (customs policy) Farid Uddin are in favour of providing the importers with the facility, NBR sources said.
They also said the NBR high-ups also sought explanation from the related officials why they were not agreed with the opinion of allowing 45 per cent depreciation on the ground of ‘public interest.’
According to the prepared summery, the NBR opined that 45 per cent depreciation could be provided under Section 19 of the Customs Act 1969 and Section 14 (1) of Value-Added Tax Act-1991 which says the government can exempt any goods from customs duties on the ground of public interest.
These cars remained stuck at the Chittagong and Mongla ports because of problems related to depreciation. Otherwise, the importers would have released their cars. So if they are provided the benefit it will not breach the public interest, the summery stated.
If the NBR now 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, the mid-level officials said.
Among others, Haq’s Bay Automobiles Ltd managing director Abdul Haque applied for the benefit for his around 900 old cars.
He said that importers did not release the cars due to discriminatory valuation method between old and new cars. Some of importers went to court to settle the issue. So the cars remained undelivered.
‘If the NBR does not provide the benefit, many of the importers will be undone as people will not buy the cars at higher prices,’ he said.
-With New Age input
