KARACHI, April 21: The customs authorities have detained over 1,000 commercial vehicles at the Karachi port following government decision to disallow import of large size vehicles under new SRO-1, issued on March 17, 2007, official sources disclosed on Saturday.

Prior to the issuance of the SRO all categories of vehicles including cars and heavy duty commercial vehicles such as trucks and buses were allowed to be imported under Transfer of Residence (TR), personal baggage and gift scheme on paying 30 per cent fine at customs stage. But the new rules have excluded the import of buses and trucks in CBU (complete built unit) condition and chassis.

Despite the fact that the import policy disallows import of old and used vehicles but the government through SRO-574 dated June 6, 2005 granted permission to individuals to import private and commercial vehicles on paying fine. The government has fixed age limit of 10 years for big and five years for small vehicles.

However, the sudden decision of the CBR to stop import of big commercial vehicles like bus and trucks resulted in detention of over 1,000 units at the Karachi port.

Besides, the loss of huge foreign exchange spent on import of these vehicles the government is going to suffer an estimated amount of Rs4 billion in revenue at an average of Rs0.4 million on each vehicle in shape of taxes and duties.

Karachi Customs Agents (KCA) action committee chairman Abdul Ghaffar Bhundi told Dawn that the government move to disallow import of these big vehicles had been taken at the behest of local assemblers who did not want any competitor in the domestic market.

He said that for long these assemblers had been putting pressure on the CBR to stop import of buses and trucks and ultimately they had succeeded in achieving their goal.Mr Bhundi further said that if the government had to stop import of these vehicles then it should have given some time to importers and individuals who imported these vehicles under different government scheme.

“You cannot take sudden decision as was in this case because the CBR issued SRO on March 17, 2007, and made it effective on the same day,” he asserted.

He demanded that at least one month period should have been given so that further imports of such vehicles were not made and people who have arranged foreign exchange for these vehicles would not have been put under this hardship.

The KCA had been demanding for withdrawal of CVT (capital value tax) at customs stage on import of commercial vehicles but so far no decision had been taken in this regard.

He said when the CVT on commercial vehicles was refundable, therefore, there was no logic to first collect the same and then refund it.

“This put importers in hassle and also become cause of corruption,” he added. Since commercial vehicles cannot be used for personal use the collection of CVT is totally wrong.

Presently, importers are compelled to pay 7.5 per cent CVT because customs duty and sales tax could not be paid for getting the vehicles cleared from the customs authorities. He refuted the claims that vehicles import was causing trade deficit and said that as a matter of fact the government was collecting huge revenue on these vehicles which were imported by individuals or commercial importers.