Court stops valuation plan for car imports

A MAKATI court has stopped the Finance Department, Internal Revenue and Customs from collecting duties on imported vehicles based on their book value instead of the transaction value under the Tax Code.

Judge Winlove Dumayas of the Makati Regional Trial Court Branch 59 ordered Finance and its attached agencies to stop enforcing Joint Order 1-2010 dated April 5.

He gave the order on June 3 following a complaint from a car importer, Benjamin Navea, who claims he and other importers will have to pay twice the amount they’re now paying if Finance insists on charging them based on their imports’ book value.

Dumayas has scheduled marathon hearings over the case to determine if he will issue a writ of injunction.

Navea claims that if Finance shifts to the book value system, he will have to pay P1 million in taxes and duties on a new Mitsubishi Pajero he plans to import from the United States, and that will compare with the P500,000 he’s now paying under the transaction-value system.

“There is absolutely nothing in Section 201 of the [Tariff and Customs Code] that authorizes the use of [the] reference price as [the] primary method of valuation,” Navea said in a statement Wednesday.

“What the law mandates is to look at the price paid or payable for imported goods resulting from the actual transaction between the buyer and the seller….”

Navea says car importers and buyers will be severely affected if Finance insists on shifting to book value, which would be discriminatory because it would be altering the valuation system only for cars.

“Is there any difference between automobiles and other imported products as to warrant a different customs valuation treatment?” he said. Elaine Ramos Alanguilan, Manila Standard Today