Over 500 dumper trucks detained: Classification dispute
By Parvaiz Ishfaq Rana
KARACHI, April 28: Over 500 dumper trucks having an estimated import value of $5 to $7.5 million (Rs300 to Rs450 million) have been detained by the customs authorities over a classification dispute for being ‘off-highway or on-highway use’ with their importers.
Ever since the government had allowed duty and sales tax free import of dumper trucks in 2000, there had been a number of disputes between the customs authorities and importers.
Initially, the government allowed duty and sales tax free import of dumper trucks for off-highway and on-highway use. However, in the same year (2000), the government had withdrawn duty and sales tax exemption and imposed a 35 per cent customs duty for off-highway and 60 per cent for on-highway dumper trucks.
But a couple of weeks later another policy change was announced and the government imposed a complete ban on the import of dumper trucks designed for on-highway.
These old/used dumper trucks are being imported from Japan at a cost of $10,000 to $15,000 per unit, and according to some estimates, so far around 4,000 trucks had been imported. These trucks are mostly of 1990 and above models, and the customs authorities some times even calculate their duty at $20,000 per unit.
With mega projects such as dams, highways and bridges are fast coming up for developing country’s infrastructure, there is a growing demand and utility of dumper trucks which are widely used across the world. According to some experts, around 60,000 such dumper trucks would be needed during the next five years to meet the demand of such projects.
Even in 2000, a dispute arose between the importers and customs authorities over the specification of dumper trucks as the latter detained around 100 to 150 units. However, the Pakistan Customs Tariff committee declared them off-highway category and were cleared by the customs.
“There had been frequent changes in the Central Board of Revenue policy over the import of dumper trucks which kept the situation highly complex and confused,” observed Haji Yagistan, President of the All Pakistan Dumper Truck and Earth Moving Heavy Machinery Owners Association.
He said the CBR on November 2, 2002 suddenly imposed a complete ban on the import of all category of dumper trucks and within next three weeks (Nov 20, 2002) made another policy change by allowing the import of off-highway design but on a condition with five tons capacity and above and in CUB (complete built up) condition.
In the past, Mr Yagistan said, the import was also allowed in SKD (semi-knocked down) condition. However, the change did not deter importers who continued to import dumper trucks to meet growing demand of such heavy duty trucks.
On a number of occasions, he said, the superior courts of the country also gave their decisions in favour of importers and verified that imported lots were for off-highway design and customs plea that they were for on-highway was wrong.
As the disputes kept cropping up from time to time and the importers maintained their plea that their imports are totally as per the government policy, however, the customs authorities continued to detain imported dumper tucks, he added. He said the Supreme Court and Sindh High Court also gave their decisions in favour of importers by declaring them off-highway designs.
At one stage, Haji Yagistan said, a customs committee formed by collector of customs also gave its decision in favour of importers and as per the Supreme Court decision, but even then the customs authorities kept raising objections and detained their imported dumper trucks from time to time.
Jahanzeb Khan Burki, general-secretary of the association, said that on one pretext or the other the customs authorities kept harassing importers and even stopped their clearance for want of certain documents, such as registration book or auction receipt from the country of import.
The litigation over the classification and design of dumper trucks continued from time to time but each time the decision was made in favour of importers. “Even in 2004, some 72 cases were decided by the tribunal and SHC in favour of importers and trucks were declared off-highway design.”
The situation further deteriorated late last year when the customs authorities included a representative of the local assemblers of heavy trucks in the customs examination committee. The committee was formed through CGO No18/2005, Mr Burki said.
He said that as a result of this development, the committee declared all imported dumper trucks on-highway category or design resulting in detention of around 500 units at the Karachi Port.
Mr Burki said the importers had also approached the CBR chairman who wrote a letter to the Karachi customs. Upon this, the classification committee of the customs examined all the 500 dumper trucks and reached to the conclusion that they are off-highway design but even then some of the high-ups at the CBR stopped their clearance.
He said the importers had invested huge amount on import of these trucks which were in great demand in the country and added that mega projects such as Gwadar Port, Coastal Highway, etc., were developed through the use of these old and used dumper trucks imported from Japan.
“If the government does not take firm policy decision on import of dumper trucks, the upcoming big projects would badly suffer and the country will have to import brand new trucks at higher cost,” he asserted.
