Used Car Import
Request for FY14 budget facility for 4,000 cars rejected
The National Board of Revenue, retreating from its previous stance, has rejected a plea of a section of importers for allowing 45 per cent depreciation benefits for more than 4,000 reconditioned cars imported before June this year, said NBR officials.
After getting the decision of the finance minister, Abul Maal Abdul Muhith, on the issue, the NBR on Thursday asked the reconditioned car importers to release their cars immediately from the Chittagong and Mongla sea ports by paying duties and other taxes under 35 per cent depreciation benefit facility, they said.
Early July, around 30 used vehicles importers applied to the finance minister and the NBR for conducting valuation of the cars imported before June this year allowing 45 per cent depreciation benefits adopted in the budget for the current fiscal year.
Before the current fiscal year, depreciation for the five-year old reconditioned cars was 35 per cent.
According to the NBR, a section of importers has not released around 3,300 used cars from the Chittagong port and around 500-1,000 cars from the Mongla port for years hoping that the government would provide depreciation at higher rate or any other tax benefits in future.
In those years other importers released more than 1,36,000 cars taking 35 per cent depreciation.
Early August, the NBR high-ups prepared a summery for the finance minister with a recommendation for allowing 45 per cent depreciation for the cars imported before June on the ground of public interest despite opposition from the mid-level officials.
The NBR, however, did not send the summery to the minister rather, on August 18, the revenue board sought Muhith’s decision on seeking law ministry’s opinion on the issue.
At the summery, the NBR had stated that under the existing laws and rules there were no scope to provide such depreciation as the cars were imported before June 2013 and importers had already submitted bills of entry for the cars, officials said.
As per rules, valuation in calculating customs duty is done on the basis of the submission date of bill of entry.
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 46 crore in revenues, they said.
On the other hand, if the importers who released their cars demand refund for additional 10 per cent depreciation, the NBR would have to pay back around Tk 1,650 crore to them.
Muhith has recently instructed the NBR to reject the plea of the importers saying that it should not be appropriate to allow 45 per cent depreciation facility to the cars as 1,36,000 cars imported before June have already been released by paying duties following 35 per cent depreciation.
Following the instruction,
the NBR asked the importers to release very soon those cars for which bill of entry have been submitted before June 6, 2013 by paying duty and taxes with 35 per cent depreciation.
Haq’s Bay Automobiles Ltd managing director Abdul Haque, who applied for the benefit for his around 900 old cars, told New Age that they would apply to the government to review the decision.
‘The decision will destroy our business as no one will buy our cars as these will be costlier because of discriminatory valuation system,’ he said.
‘Before the finalisation of the budget for the FY 2013-2014 the finance minister assured us that 45 per cent depreciation would also be available for those cars. But, the NBR has now misguided the minister,’ he claimed.
-With New Age input
