FBR Creates Special Category for Sale of Imported Diplomatic Vehicles

Diplomatic missions and embassies can now sell their used imported vehicles in Pakistan after two years without paying duties or taxes. In this regard, the FBR issued SRO.923(I)/2023 to revise SRO 577(I)/2006 on the import of diplomatic vehicles.

According to information, the FBR (Federal Board of Revenue) has created a “special category” for the sale of imported diplomatic vehicles, under which zero percent duties/taxes will be levied on vehicles sold locally following a two-year period from the date of import.

Under the new “special category” on local sales of diplomatic vehicles in Pakistan, if sold or otherwise disposed of before the expiry of two years from the date of importation, 100 percent of duty and taxes shall be leviable at the prevailing rates of exchange and duties/ taxes on value determined in foreign currency at the time of importation.

On the other hand, if the imported diplomatic vehicle is sold or otherwise disposed of after the expiry of two years from the date of importation, no duty and taxes shall be leviable, the notification added.

Under SRO 577(I)/2006, the Federal Government has exempted vehicles, including motor cars, falling under respective headings of Chapter 87 of the First Schedule to the Customs Act, 1969, imported into Pakistan free of customs duty and other taxes by diplomatic representatives or missions of foreign governments in Pakistan and subsequently sold or otherwise disposed of in the country to a person entitled to import the same without payment of customs duty and other taxes under this notification, from so much of customs-duty and other taxes as is in excess of that leviable.

This is subject to the condition that no such motor vehicle shall be sold, transferred or otherwise disposed of in Pakistan except with the prior permission of the Ministry of Foreign Affairs for which the Ministry of Foreign Affairs issues the sale permission, with a copy of sale permission of each vehicle.

The Ministry of Foreign Affairs will issue authorization for local sale on payment of customs duties and taxes as per the following Schedule depending upon the category of the country of origin of the diplomat based on reciprocity as determined by the Ministry of Foreign Affairs and approved by the Foreign Secretary with a copy of each to the FBR. Provided that in the case of used vehicles, laid down rates of duty and other taxes shall be applicable as per notification.

Source: Business Recorder