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MSPIDA unhappy with valuation ruling of motorcycle parts

MSPIDA unhappy with valuation ruling of motorcycle parts

Khurram says he has written to director valuation to add number of items not included in valuation ruling 685/2014


KARACHI: All Pakistan Motorcycle Spare Parts Importers and Dealers Association (MSPIDA) has expressed dissatisfaction over the assessment of customs values of motorcycle spare parts vide Valuation Ruling No.685/2014 dated September 15, 2014.

Talking to Customs Today, MSPIDA Senior Vice Chairman Khurram Riaz said that motorcycles were considered as transport of the poor but it is being treated as a luxury by the taxation authorities.

Motorcycle spare parts draws are bracketed with car spare parts for assessment of customs values despite the fact that motorcycle and car users belong to two entirely different segments of the society – the middle and the low middle classes and the rich respectively, Khurram said.

Not only imports of motorcycle spare parts are treated as luxury items, a fact obvious from its being subject to 35 percent customs duty despite the reduction of maximum customs duty in Budget 2014-15 to 25 percent but the import of motorcycle spare parts are also being assessed at higher values by each day, Khurram lamented.

Motorcycle spare parts import is subject to a high customs duty of 25 percent, an additional duty of 15 percent, 17 percent sales tax and 5 percent income tax the cumulative incidence of which add up to 85 percent. This is extremely unjust to the poor who are the primary users of motorcycles, he added.

Khurram said that he has written letter to the director valuation to add a number of items not included in the valuation ruling 685/2014 as well as to rectify a number of errors in valuation ruling 265/2014.

For instance, the weight of the item listed at S.NO 30 of the Ruling – gear main and counter shaft – is not correctly ascertained for the purpose of fixing value. This is so because converting kg to per piece pushes up the customs value of the item from $0.12 per piece to $0.34 per piece. This got to be rectified, he added.

Similarly, prior to VR 685/2014, the value of the said item was determined at $1.59 per kg, that is 13 pieces per kg which with the recent change would create another problem because each and every gear has different number of teeth, weight and size and such prices would vary to complicate smooth clearance, Khurram continued.

“We have made suggestion to director valuation that the previous value of $1.59 per kg be maintained or customs value of $0.12 per piece be inserted for the sake of justice.”

“In addition, MSPIDA’s proposals for a number of other motorcycle spare parts, including ring for piston, piston, key lock, carburetor, bolts, drum gear shift and clutch assembly were also not considered in valuation ruling 685/2014. We had proposed the customs values of these items at $3.50 per kg; $2 per kg; $1.20 per kg; $2 per kg; $0.80 per kg; $1.35 per kg and $1.20 per kg respectively, but due to these items not being considered they are still assessed at much higher values of $4 per kg; $2.35 per kg; $2 per kg; $4.15 per kg; $2.80/kg, $2.71/kg, $2.68/kg and $4 2.26/kg; $1.97 per kg and $1.94 per kg,” Khurram said.

MSPIDA has also asked the director valuation to correct the HS code of gear and main counter shaft at S. No 28 of valuation ruling 685/2014 from 8483.1012 to 8483.1019 and the HS code for spindle gear shaft at S. No 38 of the said VR from 8483.1012 to 8483.1019.

The association has also requested the director valuation to amend the foot note of the ruling from “this Valuation Ruling supersedes Valuation Ruling No.664/2014, dated 31.3.2014 and Amendment Dated 04.04.2014” to “All other motorcycle parts classified under respective headings, not specified above, may be assessed not below assessable value of $1.20/KG”.