Auto dealers exploiting car import policy

[Lahore_Real_Estate]

KARACHI: The local car dealers are reportedly involved in prima facia violation of vehicle import policy that was formulated to facilitate overseas Pakistanis on their return to homeland, sources told Daily Times.

The dealers have been openly exploiting car import policy—transfer of residence, gift and personal baggage scheme — at large and importing thousands of used cars at the expense of billion of dollars of foreign exchange of the country, sources said.

“They have transformed the vehicle import policy as vehicle trade policy amid complete infringement of terms and conditions described by the country’s law,” sources added.

According to Customs Act 1969 of import trade policy, used cars could be imported by Pakistani nationals in the case of his or her transfer of residence from foreign country to Pakistan, gift to relatives or friends in the country, and personal property or baggage, they said.

The laws also state that used Passengers Cars (PC) and Light Commercial Vehicles (LCV) having life of more than three years manufacturing date, can be imported by overseas Pakistani.

It restricted that an importer, who must be overseas Pakistani, is required to show that he stays outside Pakistan for a minimum 700 days during the immediately preceding three years from the date of application. The law explains further the scheme that vehicle could be gifted by overseas Pakistani to a family member, resident of Pakistan, as parents to children (adult); as children (adult) to parents; by either of the spouse; by sister to sister or brother and by brother to brother or sister.

The car import policy has been designed to protect the local industry and misuse of precious foreign exchange of the country. However, the policy facilitates the overseas Pakistanis through 2 percent depreciation relief of custom duties on car imports.

In contrast, it is observed that overseas Pakistanis do not import or gift vehicle in Pakistan but local dealers import PC and LCV in a large number — though they are totally ineligible for this policy.

The dealers have been misusing the car import policy at a massive scale, as investors are involved in the trade to earn billions of rupees through sales of imported reconditioned cars in the local markets.

It is an irony that dealers have formed their association and become successful to convert an illegal business into a legal trade practice without any fear in every big city of the country.

These dealers openly demand that the government relax the import vehicle policy further for the expansion of illegal businesses based on violation of rule of law.

H M Shahzad, Chairman All Pakistan Motors Dealers Association said that thousands of Pakistanis come and bring cars with them. He was of the view that in personal baggage scheme, car can be imported in a 4-month span — however in gift scheme, it takes one year and transfer of residence scheme takes 700 days to import. “The local car is low in standard as no local car has air bag system, however an imported car must have at least two to six air bags”, he claimed adding that an anti pollution tool that absorbs poisonous gasses is fitted in any imported car whereas local car does not have this feature.

He said that no foreign exchange is spent on import, as there is no need to open LC for it, however millions of dollars are being spent on the import of CKU and CBU by local assemblers. It is a dilemma that government officials in the custom department do not follow the terms and condition of the car import policy strictly and allow traders to import vehicles against bribery.