The Ministry of Industries and Production (MoI&P) and the Ministry of Commerce (MoC) are reported to be in a scuffle to take credit for proposing allowing the commercial import of used motorcycles, used trucks, buses, tractors and three wheelers, sources told Business Recorder.
Commerce Ministry argues that the matter relates to export and import and is, therefore, the prerogative of Commerce Ministry. Thus, any such notification must be issued by this Ministry. But MoI&P argues that this task should be given to it.
The Economic Co-ordination Committee (ECC) of the Cabinet, in its meeting on November 4, 2010, had constituted a committee comprising Secretaries of Commerce (convenor), Finance, and MoI&P and Chairman of Federal Board of Revenue (FBR), to discuss 'rationalisation of locally manufactured cars' in detail including allowing commercial import of used cars and under various other schemes, proposing tariff structure and suggest a workable mechanism. According to the decision of the ECC, the mandate of the committee was also to cover motorcycles, trucks buses and tractors.
However, the MoI&P reported to the ECC on December 7, 2010, presided by the Minister for Finance Abdul Hafeez Shaikh, that the first meeting of the committee was held on November 10, 2010 in which the convenor of the committee ie Secretary Commerce directed the MoI&P and FBR to provide additional information to devise a workable mechanism for consideration of the ECC.
Some members of the ECC showed anger to the committee for not implementing the decision of increasing the age limit of imported cars from three to five years. Besides, it was also suggested to include all types of vehicles including three wheelers. The committee met a day after the ECC meeting and decided to notify increase in age limit of imported cars under different schemes.
The MoI&P, angered at the credit for allowing five year old cars' import being given to the Commerce Ministry, issued a press release on December 15, 2010 saying that "MoI&P has prepared a new entrant policy allowing the import of all the vehicles up to five years old except motorcycles and three wheelers".
Meanwhile, Commerce Ministry prepared its own summary, which is being deliberated by the top brass of the Ministry before its submission to the ECC. Pakistan Auto Mobile Association (PAMA) is deeply concerned over this development and contacts are being made to block the new proposal, which have failed so far. Auto sector analysts express fear that the import of used cars with increase in the age limit will definitely dent sales of locally manufactured cars up to 1300 cc.
The new entrants' policy allows import of 100 percent CKD at leviable rate of customs duty for a period of three years; however customs duty would commence from the date the car is manufactured. The existing customs duty on import of CKD parts is 32.5 percent whereas the MoI&P has offered attractive incentives of customs duty for new entrants on import of CKD for the first three years.
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