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CUSTOMS CONSPIRACY? STUDENT FIGHTS FOR "PURCHASE PRICE" METHOD FOR IMPORTED MERCEDES
Ararat Davtyan
http://hetq.am/eng/articles/20716/customs--conspiracy?--student-fights-for-purchase-price-method-for-imported-mercedes.html
13:10, November 20, 2012
Six months ago, 25 year-old Sergey Grigoryan, a student at Yerevan
State University's Law Faculty, purchased a 2004 Mercedes Benz CLK
320 from the Trust Company for $10,000.
The car was shipped from Japan and finally made its way to the Georgian
port of Batumi.
Sergey picked up the car and drove it to Armenia. That's when his
troubles began with Armenian customs officials.
"At customs, Armenian officials valued the car at $17,500 and told me
I'd have to pay 34% of the value. I showed them the price actually
paid and asked if they could use that as the basis. They told me to
go to the head of the State Revenue Committee and plead my case,"
Sergey recounts.
A few years ago, changes were made to custom regulations regarding
the importation of automobiles. Cars less than five years old would
get slapped with a 32% fee. Those importing five to ten year old cars
would have to pay 34%; 11-to 15 year old cars, 42%, and cars 15 years
and older, 52%.
The official explanation given at the time was that the government
wanted to encourage the importation of new cars. Just the opposite
happened, however, but that's a separate topic altogether.
According to Armenian customs law, if an importer can certify the
purchase price with appropriate documentation, then that amount is
to be used as the basis for customs duties. Otherwise, it's up to the
customs agency to appraise the value of the item in Armenia according
to some internal system.
State Revenue Committee (SRC) President Gagik Khachatryan rejected
Sergey's request to employ the actual purchase price. Artour Afrikyan,
Khachatryan's first deputy, replied that what was missing from the
documentation were the expenses to unload the car at the Georgian port
of Poti and to get it to the Armenian customs office at the border.
"Had the officials taken a cursory glance at the documents he provided,
they would have seen that the car was unloaded at Batumi and not
Poti. They just went through the motions of examining my case,"
argues Sergey.
If an imported car doesn't get through customs in ten days, penalties
are applied. To avoid this, Sergey handed the car over to the SRC. The
student has been paying 1,300 AMD every day since July to have the
car parked in the SRC lot.
Sergey again wrote to Gagik Khachatryan and again attached all
pertinent documents. This time, Afrikyan changed his story and stated
that the cargo expenses to get the car from Yokahama to the port of
Nagoya were missing. They weren't.
"I wrote Gagik Khachatryan a third time, pointing out the $300 receipt
for shipping the car from Yokahama to Nagoya," Sergey said.
In reply, Afrikyan wrote that the basis for the SRC's rejection had
already been sent in its previous two letters. The SRC stated that
the case was closed.
>>From January 2010 to August 2012, only one-half of 1% of all the
cars imported into Armenia have passed customs on the "purchase price"
basis. We can only surmise that the lucky ones include top government
officials and others with some pull.
During the above period, 55,747 passenger cars were imported to
Armenia by individuals. Only 314 paid customs duties based on the
purchase price.
The others had to pay on the basis of inflated appraisals made by
customs officials.
But Sergey hasn't given up. He has gone to court, demanding that the
SRC levy duties on the purchase price of the Mercedes and compensate
him for damages.
Ararat Davtyan
http://hetq.am/eng/articles/20716/customs--conspiracy?--student-fights-for-purchase-price-method-for-imported-mercedes.html
13:10, November 20, 2012
Six months ago, 25 year-old Sergey Grigoryan, a student at Yerevan
State University's Law Faculty, purchased a 2004 Mercedes Benz CLK
320 from the Trust Company for $10,000.
The car was shipped from Japan and finally made its way to the Georgian
port of Batumi.
Sergey picked up the car and drove it to Armenia. That's when his
troubles began with Armenian customs officials.
"At customs, Armenian officials valued the car at $17,500 and told me
I'd have to pay 34% of the value. I showed them the price actually
paid and asked if they could use that as the basis. They told me to
go to the head of the State Revenue Committee and plead my case,"
Sergey recounts.
A few years ago, changes were made to custom regulations regarding
the importation of automobiles. Cars less than five years old would
get slapped with a 32% fee. Those importing five to ten year old cars
would have to pay 34%; 11-to 15 year old cars, 42%, and cars 15 years
and older, 52%.
The official explanation given at the time was that the government
wanted to encourage the importation of new cars. Just the opposite
happened, however, but that's a separate topic altogether.
According to Armenian customs law, if an importer can certify the
purchase price with appropriate documentation, then that amount is
to be used as the basis for customs duties. Otherwise, it's up to the
customs agency to appraise the value of the item in Armenia according
to some internal system.
State Revenue Committee (SRC) President Gagik Khachatryan rejected
Sergey's request to employ the actual purchase price. Artour Afrikyan,
Khachatryan's first deputy, replied that what was missing from the
documentation were the expenses to unload the car at the Georgian port
of Poti and to get it to the Armenian customs office at the border.
"Had the officials taken a cursory glance at the documents he provided,
they would have seen that the car was unloaded at Batumi and not
Poti. They just went through the motions of examining my case,"
argues Sergey.
If an imported car doesn't get through customs in ten days, penalties
are applied. To avoid this, Sergey handed the car over to the SRC. The
student has been paying 1,300 AMD every day since July to have the
car parked in the SRC lot.
Sergey again wrote to Gagik Khachatryan and again attached all
pertinent documents. This time, Afrikyan changed his story and stated
that the cargo expenses to get the car from Yokahama to the port of
Nagoya were missing. They weren't.
"I wrote Gagik Khachatryan a third time, pointing out the $300 receipt
for shipping the car from Yokahama to Nagoya," Sergey said.
In reply, Afrikyan wrote that the basis for the SRC's rejection had
already been sent in its previous two letters. The SRC stated that
the case was closed.
>>From January 2010 to August 2012, only one-half of 1% of all the
cars imported into Armenia have passed customs on the "purchase price"
basis. We can only surmise that the lucky ones include top government
officials and others with some pull.
During the above period, 55,747 passenger cars were imported to
Armenia by individuals. Only 314 paid customs duties based on the
purchase price.
The others had to pay on the basis of inflated appraisals made by
customs officials.
But Sergey hasn't given up. He has gone to court, demanding that the
SRC levy duties on the purchase price of the Mercedes and compensate
him for damages.