Delayed delivery: FTO tells FBR to ensure payment to customers @ Kibor+ 3pc per annum

ISLAMABAD: Federal Tax Ombudsman (FTO) Dr Asif Mahmood Jah directed the Federal Board of Revenue (FBR) to ensure payment of Kibor plus 3% per annum to customers of vehicles against their delayed delivery exceeding 60 days.

According to the FTO’s directions to the FBR, a number of taxpayers had filed complaints with the FTO stating that they suffered a lot of mental and financial hardship on account of extra financial burden due to delayed delivery, by two car companies being responsible for the same.

Complainant invited the FTO’S attention to Revenue Division’s notification SRO 837(I)/2021 dated 30.06.2021 whereby, it has been notified, vide clause (ii)(xivb) of paragraph 2 of the notification that importer-cum-assembler or OEM shall pay Kibor plus 3% per annum to the customer against delayed delivery exceeding 60 days of initial booking on the whole of the deposited amount.

The background of the recent decision by the FTO is that, in two cases, cars were provisionally booked on 08.11.2021 and 16.03.2022 to be delivered within 60-days of provisional booking with end date on 08.01.2022 and 17.11.2021, respectively, much before new budgetary measure but were actually delivered on 02.02.2022 and 21.02.2022 much beyond 60 days.

In the meanwhile, legislature enhanced the rate of Federal Excise Duty on cars on 15.01.2022.

Complainants sought relief from the FTO inviting attention to the Revenue Division’s notification SRO 837 (I)/2021 dated 30.06.2021.

FTO’s judgement: LTO Karachi, carmaker agree on refund mechanism

The FTO, after listening to the FBR, the manufacturers, car dealers as well as the complainants in both cases, observed that the FBR needs to enforce aforementioned provision of SRO on two car companies to compensate the complainant regarding delayed delivery.

In his findings issued today, the FTO held that delay in delivery of cars beyond 60 days of provisional bookings, by car company and its dealers of Lahore, is to be compensated in pursuance of clause(ii)(xivb) of paragraph 2 of the Revenue Division’s notification SRO 837(I)/2021 dated 30.06.2021.

FTO Dr Jah has not only directed the FBR to ensure compliance of clause (ii)(xivb) but has also ordained the FBR to forward detailed statement being submitted to EDB or IOCO biannually reflecting details of compensation, being paid to victims, who receive delivery beyond 60 days, in light of the SRO 837 (1)/2021.

There have been consistent complaints of delayed delivery by importers–cum-assemblers and non-abidance of the provisions of the SRO that envisages payment of Kibor plus 3% to the customers against delayed delivery.

Copyright Business Recorder, 2022