Govt finally offers 90pc depreciation facility

The government has finally offered 90 per cent depreciation facility to the reconditioned car importers to release hundreds of cars long stuck-up at the Mongla seaport.
Officials said the customs wing of the National Board of Revenue (NBR) offered the facility with an order issued Sunday, instructing the car importers to take delivery of the cars from the port within next four months.
The NBR instructed the customs commissioner at Mongla to expedite release of the cars.
Some 1,200 reconditioned cars that were imported in 2010, 2011 and 2012 calendar years are entitled to enjoy the depreciation facility.
Importers were unable to receive the reconditioned cars due to valuation-related complexities for consolidated depreciation policy and fluctuation of currency. Car importers found prices of the vehicles to be even much higher than that of the new cars as per the customs-assessed value.
In 2009, the depreciation facility for imported cars was offered under a consolidated system. The customs allowed importers to enjoy the depreciation facility in importing reconditioned cars at a rate of 35 per cent irrespective of the cars' age. As a result, the five-year-old cars enjoyed the same facility as the one-year-olds.
With the latest depreciation offer from the government, the car importers will have to pay 131 per cent import duty on 10 per cent of the valuation of the stuck-up cars. However, the depreciation will be valid only for the stuck-up ones.  
The government eventually gave in to persistent demand of the reconditioned car importers for resolving the valuation row.
Talking to the FE, president of the Bangladesh Reconditioned Vehicle Importers and Dealers Association (BARVIDA) Abdul Hamid Sharif said the government decision came following a recent instruction of the cabinet committee on economic affairs.
Reconditioned car importers have long been demanding the 90 per cent depreciation for release of the cars from the Mongla port, he added. "We hope car importers will be able to get the stuck-up cars released within the stipulated time," he said.
Earlier, the NBR had proposed 80 per cent depreciation to the importers of used cars. Official sources said the importers will have to take the cars within four months under the 90 per cent depreciation facility, failing which those cars will be put on auction as per customs law.
Abdul Huq, director of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and former president of BARVIDA, who have some 800 out of the total 1200 cars docked at the Mongla seaport, appreciated the decision.
"I have faced severe financial crunch during the last six years as those cars were imported with bank loans," he said.
He said the government's latest decision will help him release and sell the cars to the dealers.
However, the facility has been offered only for the imported cars that fall under the import policy. Cars that have been imported violating import policy order will not be entitled to enjoy the facility.
There were 2,079 stuck-up cars worth Tk 3.0 billion. Some of the jettisoned cars were released at different times from the port while some importers imported the cars by violating the import policy order.
The BARVIDA president said some 1,200 cars may enjoy the 90 per cent depreciation facility under the NBR order.
In 2009, the government opened Mongla port to import of reconditioned cars from Japan to reduce pressure on the Chittagong port.     
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