Permit holders who opened L/Cs before import ban request govt. to allow shipping of vehicles

17 December 2020 08:51 am

• A group of over 300 professionals have opened L/Cs to import vehicles before import ban

A group of professionals with letters of credit (L/Cs) established before the ban on vehicle imports using concessionary permits with foreign suppliers is calling on the government to allow shipping of their motor vehicles.

 
The group under the name ‘Group of Affected Professionals Established L/Cs before 19th of March 2020” consists of more than 300 members including doctors, engineers, lecturers, accountants and other government executives who have opened L/Cs to import vehicles for personal use while some have even placed orders prior to October 31, 2019.

Due to the COVID-19 pandemic, many barriers around the world resulted in delays of importation of these vehicles. Subsequently, when the orders were ready to be shipped, the directives issued by Import and Export Control Department restricted shipping of vehicles after May 21, 2020 by a circular issued on May 29, 2020 in accordance with Gazette Notification No.2176/19. 

Despite the ban, it is noted that certain parties continued to ship vehicles after May 21, 2020 violating these circulars.

However, a subsequent Gazette issued by the Import Controller dated June 19, 2020 and revised on June 26, 2020 allowed to clear such vehicles which were shipped to the country between May 22, 2020 to June 16, 2020 while the ban is imposed for importation of vehicles favouring those who shipped vehicles while the ban is in place. 

The affected group, that has remained a law-abiding citizen, has further encountered immense financial and physiological trauma due to not having a clear solution to the issue. In September, this year, letters were sent to authorities highlighting this issue to which responses and solutions are yet to be received.  Further, many other organisations have already submitted multiple requests to authorities seeking a solution in this regard.

Speaking on the issue at hand, the membership of the group noted, “Our vehicles have been manufactured and are ready to ship since last May. Out of the 300 vehicles 120 are parked in Singapore Port and others are at foreign yards belonging to suppliers incurring demurrages to the vehicles. Foreign/local suppliers have demanded to pay demurrages and port charges of Rs.600,000 to-date. Further, these vehicles ordered through irrevocable letters of credit cannot be cancelled, which would be a violation of international import laws.” Some members have paid advance payments as local agents’ commissions of Rs.300,000 - 500,000, which is also non-refundable and LC charges of Rs.100, 000 so far. While taking the current situation in the country in to consideration and as a solution to the issue the group would like to mention that 360 days credit period have been offered by the suppliers for the payment.

Listed below is an excerpt of grievances forwarded to the authorities. 

• Some of us have already sold our vehicles in order to raise funds to order the new vehicle. As a result many of us are currently using public transport to commute to essential jobs. 
• At least a sum of Rs.700, 000 or more is directly invested with the relevant vehicle dealers by us for the purpose of importation of the motor car through our duty concessionary permit. In most cases, these funds have been raised through borrowings or mortgaging of property. Costs incurred thus far include advances paid for the local agent, bank charges and interest expense, etc.  The group’s request is for the Government to allow shipping of these cars for which the Letters of Credit are established on or before 19th March 2020 enabling shipment of vehicles with 360 days credit. 

Since the shipments were withheld as per the new import restriction imposed by the Government on 21st May 2020, the group further requests the ability to clear these vehicles under previous duty structure for vehicles for which the letters of credit opened prior to 31st October 2019.

The group would also like to note at this juncture that it understands the government’s decision to enforce the ban during these troubled times but would like kind consideration also placed on the issues mentioned above, and the fact that valuable foreign exchange is also leaving the country via payments of demurrages etc.