The SRO 1067(I), which stirred a lot of controversy and raised a spat between importers and the government, has been declared null and void by the Federal Cabinet. The cabinet further directed Federal Board of Revenue to clear the 7,000 cars stuck at Karachi port due to a change in import policy.
The SRO 1067 was released back in November 2017 and wasn’t welcomed by car importers. The notification made it difficult for customers to import cars and it resulted in thousands of cars getting stranded at the Karachi port.
The Reason Behind Previous Policy Change
The primary reason behind this revised policy was to decrease the increasing trade deficit.
One of the major factors behind this extraordinary difference between import and exports is import of cars. Government basically loses billions of rupees in foreign exchange when people import cars instead of buying them from the local auto-manufacturing companies. So to control this and add more money to the treasury through taxes, government tightened the import policy and issued the SRO 1067(I) 2017.
As per the previous SRO, money on vehicles coming under the categories of gifts, personal baggage, and residence transfer schemes has to be arranged by the importer. Simply put, the importer has to pay the taxes in dollars and get them converted to rupees through banking channels.
Taxes were also increased across most of the vehicle categories.
This move was made to make the whole process of imports difficult and halt or at least decrease the imports. However, importers and government didn’t come to an agreement on the policy change. The importers didn’t pay for around 7000 vehicles and demanded that the new SRO be declared null and void.
The government also played its own game and temporarily relaxed the customs duty on gifts, personal baggage, and residence transfer schemes to facilitate the ordinary citizens. The relaxation, however, was given to imports made before the issuance of SRO 1067.
The Federal Cabinet finally decided to step in and solve the matter once and for all. The SRO 1067 has been annulled and all imports made will be processed under the old policy. Hopefully, it will clear the Karachi port of all the vehicles that have been stuck there for so long now.