Under the new procedure issued for foreign missions on Saturday, the CBR has laid down different conditions for the sale of diplomatic vehicles imported after April 1, 2005 and those imported before this date.
The tax authorities have divided the countries into three categories for levying duties and taxes on the local sale of diplomatic vehicles after April 2005. The category of any country will be determined by the Ministry of Foreign Affairs.
Ministry of Foreign Affairs will issue the sale permission for selling of vehicles imported by the diplomats and the copy of such permission will be provided to the CBR.
Previously, no such cars could be sold, transferred or disposed off in Pakistan without the prior permission of the CBR given on an application made to it through Ministry of Foreign Affairs or Economic Affairs Division.
The CBR has simplified the procedure of selling of vehicles imported under the diplomatic privileges through amendment in SRO 447(I)/2004.
The CBR has laid down following new schedules for payment of custom duty and other taxes on the vehicles imported under diplomatic privileges and sold after April 1, 2005.
Ministry of Foreign Affairs will issue authorisation for local sale on payment of duties/taxes as per following schedules depending upon the category of country as determined by Ministry of Foreign Affairs.
First category: If the vehicle is sold before expiry of five years from the date of its import, 100 percent duty and taxes will be leviable at the prevailing rates of exchange and duties/taxes will be calculated on value determined in foreign exchange at the time of importation.
If the vehicle is sold after expiry of five years from the date of its import, 50 percent duty and taxes will be applicable at the prevailing rates of exchange and duties/taxes on value determined in foreign exchange at the time of importation.
Second Category: If the vehicle is sold after expiry of three years from the date of its import, 45 percent duty and taxes will be applicable at the prevailing rates of exchange.
If the vehicle is sold after expiry of five years from the date of its import, 35 percent duty and taxes will be applicable at the prevailing rates of exchange.
If the vehicle is sold after expiry of ten years from the date of its import, 25 percent duty and taxes will be applicable at the prevailing rates of exchange.
Third Category: If the vehicle is sold before the expiry of three years from the date of its import, 100 percent duty and taxes will be applicable at the prevailing rates of exchange.
If the vehicle is sold after expiry of three years from the date of its import, no duties and taxes will be leviable.
The CBR has also laid down the following schedules for payment of custom duty and other taxes on the diplomatic vehicles sold before April 1, 2005:
According to the notification, no such vehicle except for those imported under diplomatic privilege shall be sold or otherwise disposed of in Pakistan before the expiry of five years from the date of its import at the following rates:
If the vehicle is sold before expiry of five years from the date of its import, whole duty and taxes will be leviable at the prevailing rates of exchange and duties/taxes will be calculated on value determined in foreign exchange at the time of importation.
If the vehicle is sold after expiry of five years from the date of its import, 75 percent of duty and taxes will be leviable at the prevailing rates of exchange and duties/taxes will be calculated on value determined in foreign exchange at the time of importation. If the vehicle is sold before expiry of ten years from the date of its import, 25 percent of duty and taxes will be leviable at the prevailing rates of exchange and duties/taxes will be calculated on value determined in foreign exchange at the time of importation.
If the vehicle imported under diplomatic privileges and sold after three years from the date of import, but before March 31, 2005, 45 percent duty and taxes will be leviable at the prevailing rates of exchange and duties/taxes will be calculated on value determined in foreign exchange at the time of importation.
If the vehicle imported under diplomatic privileges and sold after ten years from the date of import, but before March 31, 2005, 25 percent duty and taxes will be leviable at the prevailing rates of exchange and duties/taxes will be calculated on value determined in foreign exchange at the time of importation.