Car
manufacturers import car parts to assemble domestically, but they were told to
pay the high tariffs applied to the cars imported under the mode of complete
built units (CBU). Specifically, customs agencies and the Ministry of Science
and Technology had contradictory conclusions about whether the imports were car
parts or CBU cars.

“These are CBU cars” – customs
agencies judged

The Vietnam
Motors Industry Corporation (Vinamotor), which has been importing sets of car
parts and truck components for domestic assembling for the last many years,
thought that it had got much experience in the import. Therefore, they could
not imagine that one day, the sets of car parts they regularly import, would be
considered as CBU cars.

In November
and December of 2010, Vinamotor imported 90 sets of car parts for assembling
29-seat Hyundai County and 180 sets of car parts for
assembling trucks Hyundai Mighty which have the tonnage of 2.5-3.5 tons. When
checking the imports, the customs agency concluded that some components of the
imports did not fit the regulations stipulated in the Decision No 05 by the
Ministry of Science and Technology, in terms of the discreteness level which
allows telling the difference between CBU vehicles and sets of car parts.

Reasoning
that the sets of car parts that Vinamotor imported did not fit the regulations
stipulated in the legal document, the customs agency at the Bac Giang
provincial industrial zones’ management board, decided that the importer had to
pay 49.499 billion dong in tax for the 90 sets of parts for Hyundai County,
instead of 13.111 billion dong as previously defined.

Meanwhile,
the 180 sets of parts for Hyundai Mighty were imposed 35.995 billion dong
instead of 12.473 billion dong.

In
principle, the tax rates are defined depending on the separation level of the
imported car parts. Since Vietnam
encourages local production, it encourages enterprises to import components to
make cars in Vietnam,
rather than importing sets of components or nearly completed cars to assemble.
Therefore, CBU cars always have higher tariffs than sets of car parts or
separated components.

Not only
Vinamotor, Ford Vietnam (FVL) also complained that it met the same situation in
February 2011. After considering the imported components, the Hai Duong City’s customs agency concluded that the
separation level of the imports was lower than that stipulated in the Decision
No 05. Therefore, FVL had imposed the tax rates applied to CBU imports, not the
tax rates applied to sets of car parts.

These are “sets of car parts” – MST
argued

The problem
was that similar sets of car parts were imported regularly by the car
manufacturers in the past. In all the imported deals before, they only had to
pay the tax rates applied to sets of car parts.

In 2010,
all the consignments of car parts imported by Vinamotor for the Dong Vang
(Golden Field) Automobile Factory were examined by the customs agencies, with
the supervision of the General Department of Customs’ Anti-Smuggling
Investigation Department. The imports all were considered as “sets of car
parts”.

Therefore,
the latest decision by the customs agency caused shocks to the enterprises. If
they paid tax, the sums of money would be much higher than their estimates,
thus badly affecting the production process.

Vinamotor
had asked for the intervention by the Ministry of Science and Technology MST,
the agency which promulgated the Decision No 05 and relevant ministries. The
manufacturer asked the ministries to define the separation level of the imports
which would serve as the basis for the taxation.

On January
13, 2011, MST sent a document to the Ministry of Finance, General Department of
Customs and Vinamotor, saying that the imports must be considered sets of car
parts, not CBU cars.

However, in
late April 2011, the Ministry of Finance released a document, agreeing with
MST.

Source: DTCK