KARACHI: Honda Cars challenges Customs recovery notices worth Rs4.24 billion before the Customs Appellate Tribunal and the Collector of Customs (Appeals), a report issued by the company showed on Monday.
In its annual report submitted to the Pakistan Stock Exchange (PSX), Honda Atlas noted that the Collector of Customs (Appeals) had endorsed the demands worth Rs3.19 billion raised against the company by the Customs Department.
The department had raised these demands on imports affected during April 2011 to December 2016 period, on Customs duty, sales tax and income tax on the grounds that the ‘licence fee’ and ‘royalty’ paid to Honda Motor Company Limited, Japan, was included in the ‘import value’ of the ‘completely knocked down’ kits of vehicles assembled by the company and parts thereof.
Honda Cars challenges Customs
The company filed an appeal against the decision of the Collector of Customs (Appeals) before the Customs Appellate Tribunal, which is pending adjudication.
Also, the Collector of Customs (Adjudication) has endorsed the demand of Rs1.049 billion on similar grounds in respect of imports affected during the April 2017 to December 2017 period, taking the total amount involved in the matter to Rs4.243 billion.
It is the company’s contention that the subject amount of ‘royalty’ and ‘license fee’ relates to the company’s manufacturing facilities and not the goods imported by it and; hence, such amounts cannot be considered as part and parcel of the import value.
No provision on this account has been made in these financial statements, as the management considers that its stance is founded on meritorious grounds, which have been settled in the company’s favour by the Customs Appellate Tribunal in previous years, the company added.