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ISLAMABAD: The government has amended Import Policy Order (IPO), 2022, to declare that new imported new cars/ vehicles will be those which are driven up to 2,000 kilometres instead of 500 kilometres aimed at avoiding detention by Customs at the ports, sources in the Commerce Ministry told Business Recorder.

Sharing the details, sources said the Economic Coordination Committee (ECC) of the Cabinet was apprised on February 14, 2024, that the Ministry of Commerce had been approached from time-to-time by multiple importers requesting for one-time condonation of extra mileage of “new vehicle”.

The issue of extra mileage comes to the fore when the consignments of vehicles are held up for having exceeded the permissible limit of 500 kilometres as stipulated in para 2 (h) of the Import Policy Order, 2022.

Impact of imported used cars on national exchequer

In terms of para 2(h) of the Import Policy Order (IPO), 2022, a “New Vehicle” means vehicle manufactured during 12 months preceding the date of importation and neither registered nor used more than 500 kilometres prior to importation.

The Cabinet Committee for Relaxation of Import/ Export-related Prohibitions, constituted vide notification No 1(13)/2018- AC (TP) on October 11, 2022, considered such cases of “One-Time Condonation of Extra Mileage” in its meetings held from time to time and decided to allow one time release of these vehicles in relaxation of provision of paragraph-2 (h) of IPO, 2022, by exercising powers given in Paragraph 20 of the IPO, 2022.

The violation of paragraph- 2(b) of IPO 2022 by the importers was on account of road travel of these vehicles for a distance exceeding 500 kilometres from factory premises/ warehouses to ports. Considering the unique circumstances faced by the importers, wherein, these vehicles often exceed the existing requirement of 500 kilometres as mentioned in para 2 (h) of IPO 2022, para 2 (h) of Import Policy Order, 2022 may be amended to state that the vehicles driven up to 2,000 kilometres shall be considered as new, as it would help in avoiding the vehicles being detained by Customs authorities on a regular basis.

The Ministry of Commerce proposed that the para 2 (h) of the Import 2022 may be amended to state that the vehicles driven up to 2,000 kilometres shall be considered as “new vehicle”.

After a brief discussion, the ECC approved the proposal of the Ministry of Commerce. The decision has also been endorsed by the Federal Cabinet.

Copyright Business Recorder, 2024

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