Representatives of the Ministry of Finance, the Department of Import and Export, Customs and the Attorney General are scheduled to submit proposals to the court this week to end the problem that has arisen regarding about 1,000 vehicles imported through third party countries.
Border letters of credit are letters of credit opened in a third country, such as Singapore, and the first country is another, such as Japan. Importing vehicles in this way allows for the avoidance of declaring the original value of the vehicle and avoids high tariffs.
The vehicles have been waiting at the port for almost three months after being imported through letters of credit to pay lower taxes. The original plan was to re-export the vehicles to the country of manufacture. This step was later abandoned as it would violate the valuation agreement between the World Trade Organization (WTO) and the Customs Department.
Six importers sought relief from the District Court to release their vehicles, claiming that they had made the necessary declarations to Customs.
“We hope to propose a solution to the court so that this issue can be resolved,” a customs official said.
Since the liberalization of vehicle imports on February 1 this year, about 213,500 vehicles have been imported . This includes motorcycles. The total import value of these imports, including insurance, is Rs. 314 billion as of September 7, and the total tax revenue from vehicles is Rs. 446.84 billion.
So far, vehicles with a total import value, including insurance, of more than US$ 1 billion have been cleared.