ISLAMABAD: Amnesty scheme introduced by the present government to encourage investors has led to legalisation of over 54,000 smuggled vehicles and caused a business loss to local manufacturers.
This was claimed by the representatives of local auto industry during a recent meeting with Finance Minister Ishaq Dar. Sources said that Pakistan Association of Automotive Parts Manufactures (PAPAAM) claimed that introduction of amnesty schemes in 2013 had legalised 54,000 smuggled vehicles and caused a loss of business to local parts manufactures.
The industry has taken up a range of issues with the Finance Minister and sought a levy of duty on the import of used cars and withdrawal of 2 per cent tax under SRO 896 (1) dated October 4, 2013, which was withdrawn.
Sources added that PAPAAM representative maintained that Federal Board of Revenue had been unable to do anything to tackle the inflow of smuggled parts and consequently the local parts manufacturers had less access to the domestic market. An official said the industry refused to admit that the reason behind low market access was inferior quality parts produced by the local industry.
They added that industry argued that PAAPAM members who had been producing world-class auto parts for global assemblers had less that 10 per cent access to the domestic market for the reasons of rampant smuggling under Afghan Transit Trade; massive under invoicing of auto parts; misdeclaration in classification and quantities; and auto parts assessment in kilograms instead of units.
PAAPAM also stated that the state of affairs was against normalisation of trade with India. However, to ensure that domestic auto industry was not adversely affected it was critical to set up an adequate injury-protective mechanism in Pakistan.