Two vehicle distributors fined over $900,000

19 Sep 2012

Two motor vehicle distributors were fined a total of $913,000 at the Kowloon City Magistracy today (September 19) in two separate cases for selling new motor vehicles at prices higher than the permitted "Published Retail Prices" (PRP), contravening the Motor Vehicles (First Registration Tax) Ordinance (the Ordinance). One trader was fined $844,000 for four vehicle transactions, the highest penalty in such cases so far. The other trader was fined $69,000.

The two offending vehicle companies, with registered addresses in To Kwa Wan and Yau Ma Tei respectively, sold three and four motor vehicles separately at prices higher than the permitted PRP to their customers during the period from November 2010 to February 2011.

The cost of the vehicles involved amounted to $1.8 million, which was $550,000 higher than the PRP approved by the Customs and Excise Department (C&ED).

A C&ED spokesman said that the private cars involved in the cases were sold at a retail price range of between $100,000 and $500,000. The offending vehicle traders raised the PRP without applying for approval from the department in order to gain higher profits, ranging from several thousand dollars to $250,000 for each vehicle. The buyers paid higher amounts of money than the PRP when purchasing the vehicles in question, suffering monetary losses.

The C&ED attaches importance to illegal activities involving motor vehicle distributors' application for the PRP by submitting a relatively lower retail price to evade paying a higher first registration tax.

Apart from initiating verification against PRP application by inspecting the vehicles, the department will also conduct investigations upon reports received from members of the public. Prosecutions will be made if there is sufficient evidence.

Under the Ordinance, it is an offence to sell a new motor vehicle at a price higher than the PRP without the consent of Commissioner for Transport. Offenders convicted are liable to a fine of $500,000 and imprisonment for 12 months.

Members of the public who plan to buy new vehicles should ask the distributor to provide a PRP list for reference. Should there be any doubt about the price of vehicles, enquiries and reports can be made on the Customs hotline 2545 6182.

Ends/Wednesday, September 19 2012

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