Mohsin Siddiqui (Chief Reporter)
The Federal Cabinet of Pakistan has turned down a proposal to grant a one-time import exemption for vintage cars, which were imported by the elite and have been stranded at various ports. This decision, made known on December 20, 2024, comes despite considerable pressure from influential politicians and direct orders from judicial bodies.
The saga of vintage car imports in Pakistan began when the Federal Board of Revenue (FBR) issued SRO 833(1)/2018 on July 3, 2018, specifying a cumulative duty of USD 5000 per unit for vintage cars. However, this measure was never enacted due to the existing Import Policy Order (IPO) by the Ministry of Commerce, which explicitly prohibits the import of such vehicles.
The Commerce Ministry first presented a summary to the Cabinet in May 2018 to allow these imports, but the proposal needed vetting from the Law and Justice Division, which delayed action until a new government could review it. Consequently, importers took their grievances to court, leading to a series of judicial reviews.
Notably, the High Court of Sindh issued an order on November 13, 2024, in two connected constitutional petitions (Salman Talibuddin Vs. Federation of Pakistan and Muhammad Ali Vs. Federation of Pakistan), directing the Cabinet Division to reconsider the matter. The court specifically mandated the Cabinet to pass a “speaking order” with detailed reasons within three weeks, emphasizing a one-time clearance for these cars.
Despite these judicial mandates, the Cabinet, in a meeting held on December 10, 2024, revisited this issue. The Commerce Ministry had previously presented a similar proposal on July 25, 2023, following recommendations from the Cabinet Committee for relaxation of import/export conditions established in October 2022. The proposal suggested allowing the clearance of vintage cars imported between July 3, 2018, and March 7, 2022, with the condition of paying the duties specified in SRO 833(1)/2018 plus an additional 10% surcharge. This was, however, not approved on August 9, 2023.
The Cabinet’s recent refusal was based on several key points:
• Legality and Policy Contradictions: They noted that SRO 833(1)/2018 only outlined duties but did not automatically legalize the importation, which remains governed by the IPO.
• Violation of Import Laws: The cars were imported in contravention of the current IPO, and the act of importation does not grant legal rights for a retrospective exemption.
• Respect for Judicial Directives but Policy Precedence: While acknowledging the High Court’s directives, the Cabinet prioritized maintaining the integrity of import policies over one-time concessions.
This decision was also influenced by discussions in the Senate Standing Committee on Commerce, where Senator Saleem Mandviwalla had urged the Commerce Ministry to revisit the issue with the Cabinet. However, the Cabinet’s stance remained firm, reflecting a commitment to uphold established import policies over ad hoc exemptions.
This decision has sparked various reactions, with some seeing it as a necessary enforcement of legal frameworks, while others view it as a missed opportunity to resolve a long-standing issue affecting car enthusiasts and collectors. The judiciary’s involvement highlights a tension between legal enforcement and policy flexibility, a debate likely to continue influencing Pakistan’s import regulations.
