Advice on importing a damaged vehicle

[charithtg]

hey there,

i am in need of some guidance in selecting a correct method to import a vehicle from japan.

One of my relatives in Japan bought a 2018 hatchback 1200CC petrol few months back with water damage upto wheel level and have been using it there without any issues.

i got my gov permit recently and i want to get that car down here through personnel LC. the reason is i do not have to spend huge amount for the cost of the car.

As per my knowledge the CIF value in SL for the same kind of car is about 30 laks but i only have to pay my cousin in japan about 14 laks. 

if i open an LC for that amount it'll be considered as undervaluation right???   

What is the way to open an LC for lesser amount for a damaged vehicle??? 

anyone with experience in vehicle importation please advice.

PS - im not importing this so that i can hide everything and sell it for a profit. im getting it for my own use and so that others wont get rich by using my permit to import cars LOL.  

 

Edited November 14, 2019 by charithtg

[Crosswind]

LC value doesn't matter. Customs will have their own valuation for every vehicle and they will use it as the basis to calculate taxes.

If the customs value is 3 million, then your taxes will be calculated on that value, even if you pay 1.4 million or 10 million for the actual car.

And your logical fallacy is faulty generalization. 

[charithtg]

2 minutes ago, Crosswind said:

LC value doesn't matter. Customs will have their own valuation for every vehicle and they will use it as the basis to calculate taxes.

If the customs value is 3 million, then your taxes will be calculated on that value, even if you pay 1.4 million or 10 million for the actual car.

And your logical fallacy is faulty generalization. 

Thank you for the reply, i was in the same stance as well. but when i explained it to a certain SL vehicle importer, he said that cant be done as if i get an invoice to the lesser amount for LC and that will be considered as undervaluation and i will be penalized for doing that, which i was not able to further clarify from him. 

i perfectly understand that the import tax will be calculated for the CC and it has nothing to do with the CIF value, except for the new lux tax. 

[ajm]

3 hours ago, charithtg said:

with water damage upto wheel level and have been using it there without any issues.

keep whatever  money you save on the initial costs for fixing problems that  may come a few months after water damage

[charithtg]

6 minutes ago, ajm said:

keep whatever  money you save on the initial costs for fixing problems that  may come a few months after water damage

No worries, water level was upto foot rest level. No electronics were contaminated as well. So i think it'll be ok. 

Thanks for the concern..

[Crosswind]

4 hours ago, charithtg said:

Thank you for the reply, i was in the same stance as well. but when i explained it to a certain SL vehicle importer, he said that cant be done as if i get an invoice to the lesser amount for LC and that will be considered as undervaluation and i will be penalized for doing that, which i was not able to further clarify from him. 

That's rubbish. The importer is obviously trying peddle one of his own stock. In vehicle business, do not even trust your own parents.

[Quiet]

importers normally undervalue for many other reasons. If the bank accepts you will have no issue in opening a personal LC for any value you want.

[charithtg]

10 hours ago, Crosswind said:

That's rubbish. The importer is obviously trying peddle one of his own stock. In vehicle business, do not even trust your own parents.

Thank you for the advice...

[charithtg]

1 hour ago, Quiet said:

importers normally undervalue for many other reasons. If the bank accepts you will have no issue in opening a personal LC for any value you want.

I will check with the bank as well before starting anything. thanks. 

[kush]

Since this is a personal transaction valuation does not come in to play. It is the price decided between two parties, what if he give this as a gift??

As duty is based on CC valuation / LC value has no impact on duty, anyway customs will use their own valuations.

You will need to have an acceptable invoice from your cousin to open the LC with the bank giving his account details etc.. 

He will need to get the de-registration (with English translation), inspection certificate etc.. which you will need to clear and register the vehicle

Your bank will able to assist with the list of documents required.

 

[Quiet]

on second thought if it comes as a gift I don't think you even have to open an LC. You can TT the cash and tell you relative to ship the vehicle and courier the documents for clearing. Talk to a bank trade guy, I may be wrong.

[charithtg]

1 hour ago, kush said:

Since this is a personal transaction valuation does not come in to play. It is the price decided between two parties, what if he give this as a gift??

As duty is based on CC valuation / LC value has no impact on duty, anyway customs will use their own valuations.

You will need to have an acceptable invoice from your cousin to open the LC with the bank giving his account details etc.. 

He will need to get the de-registration (with English translation), inspection certificate etc.. which you will need to clear and register the vehicle

Your bank will able to assist with the list of documents required.

 

Thanks for the info, much appreciated. 

[charithtg]

25 minutes ago, Quiet said:

on second thought if it comes as a gift I don't think you even have to open an LC. You can TT the cash and tell you relative to ship the vehicle and courier the documents for clearing. Talk to a bank trade guy, I may be wrong.

well we checked on that with the Custom Controller last week. according to them, the gift scheme has been stopped indefinitely and they are not sure when it'll be reactivated. therefore, all vehicles (Except for diplomatic etc) imported to SL must have a LC opened. specially as im planing on using my permit to clear the same. thanks for the thought. 

[Crosswind]

3 hours ago, charithtg said:

I will check with the bank as well before starting anything. thanks. 

Go to a bank which deals with a lot of these stuff. They know the process inside out. Don't go to stupid little banks like *TB or go to the smaller branch of a big bank. You will end up being misled. 

I can recommend Commercial Bank Foreign Branch in Fort. Those guys deal with dozens of these stuff every day so they are well versed with the process and all types of special cases.

[charithtg]

3 minutes ago, Crosswind said:

Go to a bank which deals with a lot of these stuff. They know the process inside out. Don't go to stupid little banks like *TB or go to the smaller branch of a big bank. You will end up being misled. 

I can recommend Commercial Bank Foreign Branch in Fort. Those guys deal with dozens of these stuff every day so they are well versed with the process and all types of special cases.

I was thinking of commercial or sampath, but with your recommendation will go to the fort one directly then.. thank you sir.

PS - i like the way to mentioned *TB as stupid little; they are like that most of the time,, i used to be a customer from their initiation but not anymore.. LOL 

[Sadik]

2 hours ago, charithtg said:

well we checked on that with the Custom Controller last week. according to them, the gift scheme has been stopped indefinitely and they are not sure when it'll be reactivated. therefore, all vehicles (Except for diplomatic etc) imported to SL must have a LC opened. specially as im planing on using my permit to clear the same. thanks for the thought. 

yes the gift permit scheme stopped many years back. you can always get a reverse TT done from your relative (after the LC bills retire)  putting an invoice as consultancy services provided