Motor traders initiate legal action against Customs for violating law on vehicle valuation
View(s):Motor traders are taking legal action against the Director General Customs (DGC) for ‘violating’ Customs laws relating to valuation of vehicles.
The Attorney General (AG) has been served notice on impending legal proceedings that will be initiated against the Director General of Customs (DGC) for his ‘dismal failure’ to restore the rule of law.
Nagananda Kodituwakku & Co. has served the notice to the AG claiming that the Customs Department is violating the Customs Ordinance which provides that the primary source of valuation is the transaction value agreed upon by the buyer and seller.Issuing a recent gazette notification recently, the Finance Minister using powers vested in him by the ordinance has made it mandatory to recover the levies on the base value determined by the DGC, the notice to the AG pointed out.
The actual Transacted Free On Board (FOB) value of the vehicle fixed in the gazette notification issued on February 2015 has now been excluded from the new valuation. It has been brought to the notice of the AG that over 100 vehicles are being detained at Hambantota port by Superintendent of Customs (CIB directorate) S.K.A.S. Senanayake, challenging the minimum value on which all levies have been paid by the importers.
Customs officers were demanding payments from vehicle importers of levies under transaction value which is outlawed with the minimum value regime established under article 10 schedule E of the Customs ordinance to charge statuary levies.
In November 2013, the transaction value, the primary source of valuation for customs purposes, was replaced by the minimum value as determined by the DGC, based on the prices furnished by the vehicle manufacturers.
The notice stated, however, no rule of law prevails in the Customs concerning the taxation of motor vehicles, where some officers are allowed to abuse the new valuation regime as they pleased.