Extension of Luxury Car Import Freeze Under 1404 Budget; Where Is the 1405 Quota?

The Comprehensive Trade System extended the deadline for importing cars without currency allocation from the 1404 budget until the end of Azar. The post “Extension of Luxury Car Import Freeze Under 1404 Budget; Where Is the 1405 Quota?” first appeared on Safir Arjan.

According to Ambassador Arjan, while we have passed the half year of 1405 and the budget law of 1404 has reached the end of its implementation period, the Comprehensive Trade System, in an announcement in October, has extended the deadline for the continuation of the order registration process for passenger cars without foreign exchange from the place of paragraph "r" of Note (1) of last year's budget law until the end of December 1405; A decision that, in practice, provides the possibility of pursuing the remaining cases of this mechanism for another three months.

According to the announcement of the Comprehensive Trade System, following the letter No. 8807167 dated October 6, 1405 of the Iran Trade Development Organization, it is possible to edit the type of currency operation of the order registration files created for the import of passenger cars from the place of paragraph "R" of Note (1) of the budget law of 1404, which do not have currency provision, to the option "without currency transfer" until December 30.

This deadline was previously set until the end of September and now it has been extended for another three months. It is noteworthy that the subject of the announcement is not the registration of new orders; Rather, it is the files that were created from the budget mechanism of 1404 and have not yet been provided with currency.

Extension of the import route of luxury cars in the form of last year's budget files

The importance of this extension becomes clearer when the provisions of the Executive Regulations of Paragraph "R" of Note (1) of the 1404 Budget Law are examined. In the amendment of August 26, 1404 of this regulation, the entry rights of gasoline cars are determined based on the engine volume, and specific rates are also considered for cars with high engine volume.

According to the tariff table of this regulation, the import duty for gasoline cars with an engine volume of 2500 to 3000 cc is set at 145% and for cars with an engine volume of more than 3000 cc at 165%. The inclusion of these rates in the regulations indicates the prediction of tariff rules for this group of cars; However, setting the tariff alone does not mean that all luxury cars are allowed to be imported or that other legal restrictions are removed.

However, the extension of the deadline for the order registration cases covered by this law until the end of December raises the question why the assignment process of the remaining cases from last year's budget continues, but the status of the new car import quotas in 1405 has not been clarified.

When will the car import quota be determined in 1405?

Paragraph "r" of note (1) of the budget law of 1404 obliged the central bank to allocate at least 2 billion euros from the sources specified in the law of the seventh development plan or other approved sources for the import of new and used passenger cars with a maximum of five years of manufacture. According to this ruling, at least 20% of the anticipated resources should be allocated in each season of the year.

Now, a few months have passed since the beginning of 1405, the new announcement of the Comprehensive Trade System is still dedicated to the cases created from the same budget ruling, and there is no mention of the announcement of the new car import quota for the current year.

This situation focuses on two issues; First, the reason for the continuation of the implementation process of the 1404 budget files and the extension of their deadline until the end of December, and secondly, the timing and mechanism of the car import quota allocation for 1405.

In a situation where the country's economy is facing a severe currency shortage and the government spokesperson has announced the suspension of the car import quota for groups such as hoteliers and Iranians abroad, the comprehensive system of trade in an announcement in October extended the deadline for the continuation of the process of order registration cases without foreign currency provision from point "R" of Note (1) of the Budget Law 1404 until the end of December. Based on this, it is possible to change the type of currency operations of these cases to "no currency transfer" for another three months; A decision that raises questions about the continuation of the implementation of the car import mechanism based on last year's budget, in the absence of the announcement of new quotas for 1405.

The importance of this extension is due to the fact that the Executive Regulations of Clause "R" Note (1) of the Budget Law 1404, for gasoline cars with an engine capacity of 2500 to 3000 cc, the entry fee is 145%, and for cars with an engine size of more than 3000 cc, the entry fee is 165%. This group of cars, especially models with an engine volume above 3000 cc, are generally classified as luxury cars. Therefore, the extension of the deadline for the cases included in this mechanism also provides the possibility to continue the process of importing cars that need to clarify their position in the country's commercial and currency prioritization; However, changing the type of currency operation to "no currency transfer" does not automatically mean the allocation of currency from official sources.

The main question is why, in the conditions of limited foreign exchange resources and the suspension of some car import quotas, the assignment of the cases related to the 1404 budget law has been extended for another three months, but the car import quotas in 1405 are still unclear? The Trade Development Organization and the Central Bank should make it clear that this extension was done only to determine the assignment of the previous cases or in practice it will lead to the continuation of the import of luxury cars. Clarification about the number of included cases, the status of providing resources and the time of announcing new quotas is necessary to determine the ratio of this decision to the country's foreign exchange priorities.

In sum, the October notification of the Comprehensive Trading System is not just an administrative extension; This decision indicates the continuation of the assignment of car import cases within the framework of last year's budget. However, until the status of the new quotas, foreign currency sources and executive regulations for car imports in 1405 are clarified, the question about the ratio between the renewal of old cases and the car import program this year will still remain.