The fourth Pay Commission has recommended the option of monetising the existing vehicle quotas. This means that those public servants who are eligible for vehicle import quota can opt for monetary compensation.
At present civil servants in the P3 level and above are entitled to a vehicle quota every seven years. This exempts them from paying customs duty and sales tax up to Nu 800,000.
Similarly, Cabinet Ministers and Members of Parliament are entitled to a one time free of customs duty and sales tax exemption to import a vehicle up to 3000 CC per term.
The PC report says, “It has been observed that most of the vehicle quotas are sold in the market even though it is not permitted as per the existing vehicle quota rules 2014.” The report says the main reasons for the sale of the vehicle quota are that the quota holder already owns a vehicle or lack of finance for the purchase of vehicle themselves.
The Pay Commission has reported that issuing vehicle quota has implications in forgone revenue. A minimum of Nu 620.6 M of revenue was forgone, last year. The revenue-forgone doubles if vehicles are imported from countries other than India.
The report also says the import of vehicles has resulted in depletion of foreign reserves and this impact would be much higher if accounted for import of fuel, accessories, and spare parts.
Therefore the Pay Commission has suggested Nu 250,000 in lieu of the vehicle quota. The ministers and MPs can take the onetime Nu 1.5 M in place of the quota.
The Pay Commission has also recommended the government to issue one time vehicle quota or Nu 1.5 M take away an option to the holders of offices appointed by His Majesty The King.
The positions are Chief Justice of the Supreme Court, Holders and Commissioners of Constitutional Offices, Justices of the Supreme Court, Chief Justice and Drangpons of the High Court, the Attorney General, Cabinet and Government Secretaries and the RMA Governor. All of them are currently are entitled to the Nu 800,000 ceiling vehicle quota.
The Thrompons and Gups have also been recommended to be issued with the Nu 800,000 ceiling vehicle quota.
However, if public servants decide to take the quota and then sell it illegally, the commission has recommended a penalty, double the original vehicle cost.
