Under the said CGO, for the purpose of assessment of motor vehicles, the age of used/second hand motor vehicles imported under Personal Baggage, Gift and Transfer of Residence schemes is to be determined from the January 1 of the year subsequent to the year of manufacture till the date of shipment as per Bill of lading instead of the date of first registration abroad. Mainly, Model Customs Collectorate Appraisement Karachi deals with the import of old and used vehicles and recent changes in the deprecation rules, the clearance of the imported vehicles has been drastically reduced following issuance of the said CGO.
Information collected from Karachi further revealed that the issuance of the CGO has started affecting clearances of the imported vehicles. People are reluctant to get clearance of their vehicles due to the change in the procedure of the duty assessment of motor vehicles. The concerned associations are actively interacting with senior customs officials on the issue. However, to avoid demurrages on the imported vehicles, the importers have to clear these vehicles within 5-7 days of their import. Through the new CGO, the FBR has clarified the calculation of date of the import of old and used vehicles to remove any ambiguity during clearance of used vehicles, especially in case of demurrages. Previously, under the CGO No 14/2005, the depreciation in the assessable value, for the purpose of assessment shall be allowed on the import of used/second hand motor vehicles at the rate of 2 per cent per month for each completed month, calculated from the date of first registration abroad up to the date of entry into Pakistan, subject to a maximum of 50 per cent.
Through new CGO 13 of 2012, the depreciation in the assessable value, for the purpose of assessment shall be allowed on the import of used/second hand motor vehicles at the rate of 2 per cent per month for each completed month, calculated from "1st day of January for the year subsequent to the year of manufacture till the date of shipment as per Bill of lading", subject to a maximum of 50 per cent.
Under the CGO 14 of 2005, the Board has prescribed the procedure for assessment of motor vehicles to ensure its uniform application at all Customs stations throughout the country. Following is the text of the CGO 13 of 2012: The Federal Board of Revenue is pleased to direct that the following further amendment shall be made in Customs General Order No 14/2005 dated 6th June, 2005, namely:- In the aforesaid CGO, after the words "calculated from" occurring in paragraphs 2, 2A and 2B respectively, the word "the date of first registration abroad up to the date of entry into Pakistan", shall be substituted with the words, "1st day of January of the year subsequent to the year of manufacture till the date of shipment as per Bill of landing", CGO added.