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Customs order implements safeguard duties on autos

  • The Bureau of Customs is imposing provisional safeguard duties on passenger and light commercial vehicles for 200 days beginning February 1
  • Customs Memorandum Order No. 06-2021 implements a Department of Trade and Industry order aimed at protecting the struggling domestic motor vehicle manufacturing industry
  • The provisional safeguard duties is in the form of a P70,000 cash bond per unit of any four-wheeled passenger car designed to transport less than 10 persons

The Bureau of Customs (BOC) is imposing provisional safeguard duties on imported passenger and light commercial vehicles for 200 days starting February 1.

Customs Memorandum Order (CMO) No. 06-2021, dated and effective immediately on February 1, implements Department of Trade and Industry (DTI) Department Administrative Order (DAO) No. 20-11 issued in December last year.

READ: DTI slaps safeguard duties on imported passenger cars, light vehicles

DAO 20-11 provides for the imposition of provisional safeguard duties on imported passenger and light commercial vehicles (LCV) to protect the struggling domestic motor vehicle manufacturing industry.

The duration of the imposition of the provisional duty is 200 days, reckoned from the issuance of the relevant CMO, pursuant to Section 8 of Republic Act No. 8800, or the Safeguard Measures Act.

Under CMO 06-2021, the provisional safeguard duties will be in the form of a cash bond amounting to P70,000 per unit of any four-wheeled passenger car designed to transport less than 10 persons, and not primarily to transport goods classified under Association of South East Asian Nations (ASEAN) Harmonized Tariff Nomenclature (AHTN) Code 8703.

Imported passenger cars that are completely knocked down (CKD), semi knocked-down (SKD), used, with electric motors, and those designed for a special purpose such as ambulances and hearses are excluded from the coverage of the provisional duty. Also excluded from the provisional duty are luxury passenger cars that have a free on board (FOB) value of US$25,000 or higher.

A cash bond of P110,000 will also be imposed per unit of imported LCV whether four-wheeled drive or not which are designed to carry both passenger and cargo that are classified under AHTN Codes 8704.21.19 and 8704.21.29. Imported LCVs that are CKD, SKD, used, with electric motors, and those designed for a special purpose such as ambulances and hearses are excluded from coverage. Further, LCVs that have an FOB value of $28,000 or higher are excluded.

Pursuant to the Finance secretary’s letter, the imposition of provisional safeguard duty will be reckoned from the issuance of CMO 06-2021. The provisional safeguard duty imposed and collected should not form part of the landed cost that is used as basis for the value-added tax to be paid upon importation.
For purposes of computing excise tax, the provisional safeguard duty will be deducted from the net importer’s selling price and suggested retail price.

DTI moved to impose the safeguard duties after determining that increased importation of passenger cars and LCVs substantially harmed the domestic motor vehicle manufacturing industry.

The agency undertook the preliminary determination for safeguard measures upon a petition filed by the Philippine Metalworkers Alliance.

DTI’s preliminary determination also found that critical circumstances exist where delay in imposing the measure would cause the industry damage which would be difficult to repair.

The provisional safeguard measures take effect while the case is under formal investigation by the Tariff Commission. – Roumina Pablo

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