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FBR proposed simplification of valuation for imported vehicles

FBR proposed simplification of valuation for imported vehicles

KARACHI: Federal Board of Revenue (FBR) has been advised to simplify valuation and levy of duty and taxes on imported vehicles.

Officials in FBR said that in budget proposals received for 2020/2021, the business community proposed simplification of valuation and fixing duty and taxes.

According to the proposals the valuation of vehicles may also be simplified and fixing duty / taxes as is already done for 1000 CC , 1300 CC and 1600 CC vehicles.

The duty for vehicles above 2000 CC may also be fixed or manufacturer’s retail price for each year may be made a basis and give lump sum adjustment on account of various factors.

This will simplify the assessment procedure.

Further, the business community also recommended simplification of assessment and duty/taxes regime for imported goods.

Currently entrepreneurs who want to set up new industries and importers wanted to know about the incidence of tax on various items have to contact either some customs expert or department.

The department never gives proper reply in a given time period or sometimes does not respond at all.

It is therefore proposed that the module of WeBOC relating to filing of GD and calculation of duty may be separately placed on the website of FBR so that any person can fill-in the description of item and HS code to get incidence of duty and taxes for imports.

At present, the custom duty is calculated on the original value whereas sales tax is calculated on the duty paid value (value +customs duty), FED is calculated on (value +customs duty+ ST) and income tax / withholding tax is calculated again on original value.

This makes the system very complicated. In case of sales tax the rate is already high i.e., 17 percent but it’s calculation on duty paid value further increases the rate beyond 17 percent. (If value is Rs 100 and custom duty is 15 percent the sales tax comes to Rs 21.25 instead of Rs 17).

In this way a common man will be able to calculate duty and taxes on any item.