Cabinet refuses to release old cars
The government has turned down the proposal of giving a one-off exemption on the import of vintage cars stuck at different ports, noting that these cars have been imported in violation of the policy and importers cannot be granted ex-post facto permission.
While discussing the proposal of the commerce ministry in a recent meeting, the cabinet carefully considered the observations of the Sindh High Court.
It noted the apparent anomaly created by the Federal Board of Revenue's (FBR) SRO 833(1)/2018 pertaining to the prohibition on the import of vintage cars under the Import Policy Order (IPO). The cabinet remarked that while it accorded the highest respect to the directives of the Sindh High Court, it was of the collective view that a one-time import clearance for all vintage cars, as proposed by the Ministry of Commerce, could not be given. The cabinet said that the SRO 833(1)/2018 dated July 3, 2018 only specified the duties and taxes to be charged in the case of vintage cars, if and when such cars were permitted to be imported.
As such, a simple specification of a duty or tax on an import item in the FBR's SROs does not automatically imply its permissibility for import. The cabinet noted that the vintage cars in question were imported in violation of the prohibition in the IPO and the mere fact that they had been imported did not entitle their importers to be granted ex-post facto permission for the violation.
The cabinet considered a summary on one-time relaxation to clear the way for the release of vintage cars, and for the reasons recorded, did not approve the proposal.
It was pointed out that the Ministry of Commerce had earlier submitted a summary to the cabinet on July 25, 2023, seeking the release of all vintage cars stuck at ports, subject to the payment of duties, with an additional surcharge of 10% of the applicable duties. However, the proposal had been turned down. Cabinet members noted that the Sindh High Court, in its order dated November 13, 2024, had directed the Cabinet Division to place the matter afresh before the federal cabinet.
Earlier, a summary suggesting permission for the import of vintage cars was placed by the Ministry of Commerce before the cabinet in May 2018. However, since the requisite SRO had not been vetted by the Law and Justice Division, the Ministry of Commerce was directed to place the summary before the next elected government.
In the meantime, the FBR issued SRO 833(1)/2018 dated July 3, 2018, which specified a cumulative duty of $5,000 per unit on the import of vintage or classic cars. It was enforced despite the prohibition in the IPO. However, it was never implemented due to the restriction.
In January 2019, the Ministry of Commerce sent a summary to the Economic Coordination Committee (ECC), proposing an amendment to the IPO to allow the import of vintage cars. However, the proposal was rejected.
The importers of vintage cars approached different high courts for the release of their cars. While a few courts ordered their release, a larger bench of the Sindh High Court gave directives that the federal cabinet should consider the applications for a one-time relaxation.
The Sindh High Court, in its order dated April 3, 2023, directed the Ministry of Commerce to place the matter before the cabinet afresh for decision through a speaking order in light of the judgement dated October 27, 2021 and April 3, 2023.
Accordingly, the matter was placed before a cabinet committee, which directed that the matter should be taken up in the federal cabinet.
It recommended that a decision, in principle, be made to allow the one-time clearance of all vintage cars imported between July 3, 2015 and March 7, 2022, subject to the payment of duties, with an additional surcharge of 10% of the applicable duties.
In pursuance of the recommendation, the Ministry of Commerce placed a summary dated July 25, 2023 and titled "One-Time Relaxation for Release of Vintage Cars" before the cabinet. However, the cabinet, in a meeting held on August 9, 2023, did not approve the proposals contained in the summary.
Recently, the Sindh High Court, in its order dated November 13, 2024, directed that the matter be placed afresh before the federal cabinet, keeping in view the judgements of the court. The cabinet was directed to pass a "speaking order" with reasons within three weeks.
The Ministry of Commerce said that the FBR, upon consultation in terms of Rule 8 of the Rules of Business, prior to the ministry's placement of the summary before the cabinet, concurred with the proposal to grant a one-time relaxation for the release of vintage cars, subject to a minimum 25% surcharge on the C&F value, with the stipulation that only those vehicles imported between July 3, 2018 and March 7, 2022 may be cleared.
Additionally, the FBR provided a list of vintage cars stuck at various ports, which was placed before the cabinet.