Car import policy abused by dealers

By
Staff
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43
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LAHORE – Though most tax related laws in the country are being abused, no law is being flouted with the same frequency as “the personal baggage, transfer of residence and gift schemes (import of vehicles)”.
Automobile manufacturers believe that it is not only causing a loss running into billions of rupees to national exchequer but also threatening the viability of the local automobile and vending industry. The recent decision of the federal government (which has been declared void now) to raise the import ‘age limit’ of used cars from three years to five years has revealed some very interesting facts.
Official figures show that Pakistan imported some 4,000 used vehicles during previous year, but car dealers claim that to push home the advantage on the policy change, they had booked some 7,000 to 8,000 units of used vehicles, worth around Rs 10 billion ($116 million), in merely a month. Car dealers are livid that the government’s u-turn on used car import policy, at a time when they have committed an investment of billions of rupees in foreign markets.
Experts argue that one can easily detect a discrepancy in the used cars import policy. They draw attention to the fact that while in the previous year the country had imported only 4,000 cars, dealers claim they have booked orders for 8,000 units in just one month. The alarming disparity casts doubt whether the law is actually addressing legitimate demand or being misused by car dealers.
Experts said that the personal baggage, transfer of residence and gift schemes is meant to facilitate Pakistani expatriates, who want to import vehicles for their own usage or their families. They pointed out that under the special regime; taxes are levied on the basis of engine capacity, irrespective of the value of the vehicle and the optional and additional accessories, which might be justified if rules were being implemented in true letter and spirit.
They point out that car prices of two different brands could not possibly be the same in all cases. “It is really strange if the Federal Board of Revenue (FBR) believes that a 1,000CC variant of BMW and Suzuki has the same price,” experts argue. Another interesting aspect is that Pakistan has the most liberal car import policy in the region.
Data available to Pakistan Today shows Pakistan levies a 50 percent duty on new car import up to 800CC, 55 percent on 801CC to 1,000CC, 60 percent on 1,001CC to 1,500CC, 75 percent on 1,501 to 1,800CC and 100 percent on cars having engine capacity of over 1,800CC (plus 50 percent Regulatory Duty), while India has 100 percent customs duty on all car imports irrespective of their engine capacity and brand.
In addition, India charges 12.5 percent VAT, 16.5 percent Excise Duty and other Para-Tariffs, including 16 percent CVD, four percent SCVD and three percent Education Cess. Similarly, auto manufacturer in Thailand also enjoy a stringently protectionist regime with Thailand levying 80 percent Customs Duty, 30 to 50 percent in the form of additional taxes and 17 percent in other taxes on new car imports.
Data shows that auto manufacturers in India have the most protectionist regime in the region. Figures show in India complete knock-down (CKD) kits could be imported on five to 10 percent duty, in Thailand CKD kits are imported at 32 percent duty while import duty rate on CKD kits is 32.5 percent, which is the highest.
A similar situation is with the import of used cars. Data shows that irrespective of the make and brand, Pakistan has fixed import duty of $2,816 on cars up to 800CC, $3520 on cars having engine capacity between 801CC to 1,000CC, $7,040 on 1,001CC to 1,300CC, $9,856 on 1,301CC to 1,500CC, $11,968 on 1,500CC to 1,600CC and $14,784 on cars having engine capacity between 1,601CC to 1,800CC, while in India used cars have 100 percent basic import duty plus 32 percent addition duty and taxes and Thailand has same duty structure as for new cars.
In addition, both India and Thailand has several other non-tariff barriers to discourage car imports. Experts said that the government wanted to attract foreign investment in the automobile sector to promote the healthy competition, but in the present circumstances with existing car import policy in place, it seems to be a far fetched scenario.

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43 COMMENTS

  1. I would like to rimed Mr Imran adnan to check the price of 1600cc cars in India and com pair those prices with that of in Pakistan you will see that the Car of a better quality is Les then half the the price in Pakistan, as we all know the inverter in Pakistan wants to make a kill over night by the Huck or crock.

  2. completey agreed with khalil . ridicoulous, I was amazed, rather shocked when I heard the xli corolla which costs 1.4 million rupees doesent' even have ABS breaks in it or any power windows.

  3. First thing, both India and Thailand are producing large number of models of international standard. So competion is there and people have a lot of options in brands and engine capacity whereas this is not the case in Pakistan. Here people are forced to buy 25 years old Mehran for 5 lakh and there is no other car in this capacity. Secondly direct comparison of prices with India is not right since 1 $ is equal to 46 Indian rupees as compared to 86 pakistani rupees.

  4. agree vd khalil..u knw from where u r importing the meterials or parts of cars fr manuftring in pakistan new madel cars.the same money u r sending to them as u r sending fr imported cars.so wht is dif,dif s that in low price u can use a comprtabl nd nice car.

  5. i want to remind Mr Imran Adnan that in india and thailand , all the world major brands of cars are manufactured and sold at very reasonable price while in pakistan only limited brands of honda, toyota and suzuki are available. So if we prefer to live and work in pakistan, we cant have the luxury of driving any nice cars. I dont know how much money is getting the government of pakistan from honda, toyota and suzuki but how much the people of pakistan are suffering at the hands of these rubbish car brands. As pakistan is not getting the major manufacturers of car to invest in pakistan, the solution is that there should be an open car import policy with very limited import duty.

  6. can people import INDIAN cars from India and Export it to Pakistan. how much is the EXCISE DUTY, and other levies?.

  8. i hope mr imran adnan recieved a big check for this article … full of crap … car manufacturers here in pakistan have become a mafia … bribing government to have laws that favor them implemented … in pakistan you get a shitty manual corolla for 14 lacs .. which doesnt even have abs or airbags … and that too in 2011 … i wud very much prefer to import a bmw 3 series fully automatic 1996-99 model for just 4 lacs(price including shipping and taxes) than a locally manufactured new car

    • I see BMW 1996-99 really nice care but Raheel as you know more then 5 year old cars you can not bring in Pakistan so how??? kindly advise

  9. Hello Aoa All friends can any body guide me the current status of import policy on Cars in Pakistan

  10. hi to all
    can any one know the way that a common man not a buisness man to import a car to pakistan. i willl be very thanksfull
    becoz i am stucked

  11. The government and these so called car manufactures do not care about the people of Pakistan.They are like blood sucking vampires draining us by providing the world's shittest cars on very high price.Thats like a mafia and they know that people in Pakistan has got no idea about consumer rights.We are far behind with the rest of the world and all i see is detoriation day by day.

  12. HI MY NAME MOHAMMAD UZMAN I WANTH TO SAND CAR FORAM IRELAND TO PAKISTAN B M W 316I 1800CC 2003 YAHER PLZ TIL ME HOMACH HAVE CUSTAM DUTY PLZ

  13. Dear Mr Imran Adnan

    Do you actually live in Pakisan! Do you have any appreciation that we are being robbed in broad daylight! The quality of cars built in Pakistan is appauling and extremely over priced.

    As for short changing the government, the government would receive far greater revenue if they reduced the import duty as was the case upto 2007. All the current levels of duty has achieved is reduced levels of income for the government and more non custom paid cars on our roads.

  14. Pakistani Government sucks.. Its better to do suicide attack in the custom house Karachi. where they ask you to pay thousands of dollars custom clearance of your vehicle…… Every body want to drive BMW type cars.. but we are still using the f.u.c.k.i.n Cowrolla .. totally agree with raheel…

    anyhow here i have a question @ raheel.

    What kind of vehicles or cars can you import into Pakistan under the Personal Baggage/Gift Scheme and TR Scheme?

    A) You can import any vehicle which is new under 2 years old. This includes Cars, Buses, Vans, Trucks, Pickups and 4×4 vehicles.

    For vehicles which are over two years old you can import them under the TR Scheme as per Import Trade and Procedure Order, 2000.

    Thq point is what is " TR Scheme as per import trade and procedure order,2000"??

    Is there any special condition to import more then 2 year old car ?
    I think this could be a special zardari tax system.. damn it..
    plsss explain this condition ??

    • @ mansoor
      i only want to correct you that not 2 year u can import not more than 5 year used vehicale under all 3 scemez.thanks

  15. I Agree with Khalil. Why Pak Suzuki is not being sacked as it remained and is still the largest manufacturer of automobiles in Pakistan but they don’t bother to modernize the car technology. We are still buying Alto & Mehran based on 20+ year old technology. And what a shame, that they increase the price of vehicles after every 2-3 months.

  17. a o a dear sir, i parchase the 2 motar bikes in india 150,cc and 220cc so plz tel me custam duty and other charging india to pakistan, lahore

  18. I think Imran ran away after writing this article or may be he has got 800 cc mehran from suzuki to drive as a taxi

  20. I support open import policy in Pakistan to break the monopoly of local car dealers. Japnese used cars are far better than new scrap like suzuki car (Mehran, cultus etc) in Pakistan. e.g. one can buy 660 cc used Japnes fully automatice car with power window, power steering, power mirrors, air bags in PKR 650K which is much better and luxurious than new Mehran which has cycle like brake system and is available in more than PKR 730K.

  21. i support Muhammad shakeel the car manufacturar like suauki,toyota are looting poor pakistani peoples.They are mafia and govt support them.

  22. i am trying to import a car from japan through a website please guide me about frauds / customs please. please help me.

  25. People must be blind not to see the old bangers polluting pakistan, my god they still have cars on the roads that have not been manufactured for decades.If you buy from a showroom in Pakistan . the cars are substandered, low spec but costs more then in the UK . Unless you can bribe some corrupt official or you know some one in postion of power unlikely you can export a car for your own use in Pakistan for a reasonable price,prove me wrong some one

  27. Can I simply say what a comfort to find somebody that really understands what they're talking about online. You actually realize how to bring a problem to light and make it important. More and more people need to read this and understand this side of your story. It's surprising you are not more popular since you definitely possess the gift.

  28. In Pakistan we get charged a fortune for complete rubbish. In the western world only vintage cars appreciate in value but Pakistan any cr*p can go up in value due to a lack of supply.

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  32. government of Pakistan must uplift all taxes they have imposed on new cars made in Pakistan & From Patrol , CNG, GAS & Electricity that will help to lower the prices & also to lower the poverty in Pakistan

  33. Car dealership is a tough task for the people. Dealership means people have to look for many things according to the people want. Most of the dealer likes to choose car for their showroom of user demand. User demand matters more in case of vehicles. Technology inventing new models every day people want also changing day to day. But price of car matters for the people who want their car with all the luxurious facilities but having less money. Sometime dealers are also provides to loan the people to purchase their own car but they faced a lots of problem after doing that. That the reason the Pakistan dealers banned the dealership also.

  34. A shameless government who cannot give free food or at-least big subsidies on food for people, then how you can expect they will give relief in personal transport of people.

  35. Oh God! It’s not too long (in past) when a common man can build prestigious home in 15Lac but it was hard for him to think about to buy a Car. And now government is saying O man! Buy a Toyota Corolla (XLI) in 15Lac and put your 15Lac on Road, Don’t think about home (which we have made impossible now for you). O man! Talk to your F&F in 1 Rupee and that on Mobile BUT Don’t think about Food (which we have made so expenses that you cannot buy 1 bread even in 5Ruppees) — We are making you Asian Tiger and We are restoring Khalafat !!!
    Oppssss!!! Really Really Oppsss!!!

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