VCN- The General Department of Vietnam Customs (GDVC) has asked local customs departments to impose special consumption tax on pick-up cars.
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The GDVC cited Point d, Clause 1, and Article 2 of the Law on Special Consumption Tax No.27/2008 of the National Assembly as saying under-24 seat cars, including cars for both passenger and cargo transportation with two or more rows of seats and fixed partitions between passenger holds and cargo holds.
Clause 4 of Section I of Special excise tax schedule of Clause 2 Article 2 of the Law No. 106/2016/QH13 stipulates passenger cars with nine seats or less, except for those specified in Points 4dd, 4e and 4g of this schedule. Pick-up car, except for those specified in Points 4, 4e and 4g of this schedule with cylinder capacity of 2,500 cm3 or less, those with a cylinder capacity of more than 2,500 cm3 to 3,000 cm3, and those with a cylinder capacity in excess of 3,000 cm3 will be applied a tax rate of 15%, 20% and 25%, respectively.
Clause 1, Article 5 of Decree 108/2015 of the Government dated October 28, 2015 provides motor vehicles designed to transport both passengers and cargo mentioned in Point 4d and 4g of the excise tax schedule are those that have at least two aisles and a partition that separates the passenger compartment and cargo compartment per national standards promulgated by the Ministry of Science and Technology.
The Law on Special Consumption Tax does not provide a term of “compact car” for vehicles subject to Special Consumption Tax or those not subject to Special Consumption Tax.
If enterprises import pick-up car under provisions in the Law No. 106/2016/QH13, meeting standards issued by the Ministry of Science and Technology and the Special Consumption Tax rate specified at Point 4d, Article 7 of the Law on Special Consumption Tax will be applied.
The GDVC cites Circular 65/2017/TT-BTC and refers to the HS 2017 of the World Customs Organization saying pick-up cars for transport of people is under heading 87.03 and pick-up cars for transport of goods under heading 87.04.
As for specialised commodity standards, Decision No. 2431 dated November 8, 2010 of the Ministry of Science and Technology stipulates that pick-up cars for the transport of people described in point 3.1.1 have least one feature different from cargo pick-up cars described in point 3.2.7 (applicable to pick-up cars with single cabin) and point 3.2.8 (applicable to pick-up cars with double cabins), which is a ratio "Total weight of the number of people allowed to carry (Mng)" and "total weight of goods allowed to carry (Mh)" < 80% (Mng=65kg/person x number of seats).
Compared with regulations, the Law on Special Consumption Tax and the decree guiding not to use the term "compact cars" as goods subject to special consumption tax. If firms import pick-up cars according to the provisions of the Law on Special Consumption Tax, amended and supplemented in Law No. 106/2016/QH13, Point 4d, Article 7 of the Law on Special Consumption Tax will be applied.
Official Dispatch No. 6741 of General Department of Customs dated November 16, 2018 guides classification and HS determination for “Ford Ranger Raptor” car but does not guide SCT on this kind of car.
The GDVC said, imposing special Consumption Tax on pick-up cars under the tax rate of pick-up cars for transport of people according to Official Dispatch No. 6741/TCHQ-TXNK by local customs departments is unreasonable.
By Nu Bui/Ngoc Loan