National Board of Revenue has turned down a request to allow 45% depreciation on around 2,500 reconditioned cars waiting at the Chittagong and Mongla sea ports to be released.
A section of the importers are not clearing the vehicles, imported during the last fiscal year, demanding the benefit given for the current fiscal year, a senior official told the Dhaka Tribune on Tuesday.
“These cars are eligible for 35% depreciation facility as per the law,” said the official. “If we give them 45%, what we would do if other importers who released their vehicles at 35% depreciation want their money back.”
Considering the difficulty and with approval from the finance minister, the NBR decided not to give them the “illogical” facility, the official said.
According to an estimate by Bangladesh Association of Reconditioned Vehicles Importers and Dealers Association, many of the importers brought in such cars during the period 2010-13 have already released 70,000 cars with 35% depreciation facility.
Only a section of the importers did not release cars demanding the new facility illogically, resulting in stuck up of 2,500 cars at the ports for the last three years, said an importer.
NBR sources said the revenue body on Thursday asked the reconditioned car importers to release their cars immediately from the ports by paying legitimate duties and other taxes in accordance with the 35% depreciation benefit.
Earlier in July, a section of the vehicles importers met the NBR chairman and finance minister to re-asses the customs act and gave them 45% depreciation benefits.
As per the budget for FY 2014, 45% depreciation has been proposed for 2008-09 model 1500cc cars while for 2010 model it is at 40%, for 2011 model 35% cent and 2012 model 30%. Earlier the traders got 35% depreciation for all such cars.
Cars importers said both the government and the importers will face substantial losses due to delay in releasing the cars.
Haq’s Bay Automobiles Ltd Managing Director Abdul Haque had applied for a substantial number of 1106 imported cars while others imported cars ranging from three to 30.
Haque said NBR has misguided the finance minister to take the decision. He, however, said he would not release the cars and apply to the government to review the decision.
“Due to the decision, we will face huge losses in business. It would also result in traffic at sea ports, banks will not get their money back in due time, government will lose its revenue and we will be bankrupt. We expect that the discriminatory valuation system will be reviewed,” he said.
New Auto Galaxy Managing Director Nazmul Islam Alam said that 39 importers has applied for the depreciation facility, but 87 importers have around 2,200 to 2,300 cars worth Tk3bn remain stuck at the ports.
“We will not release the cars, rather we will sit with the finance minister and prime minister to make a solution out of the issue,” he said.
However, BARVIDA President Md Habib Ullah Dawn said if there is any chance to re-assess the customs act and if it allows having 45% depreciation, he would be happy since it would benefit his association members.
However, he said that there is no example of re-assessing the customs act for such benefits in last 35 years.
