Import of used vehicles: Cabinet Division giving 'unreasonable' impression: MoI&P

The Cabinet Division is reportedly giving an 'unreasonable impression' by resisting a stated fact in the minutes of the Cabinet with regard to import of five years old used vehicles; contrary to the decisions of the Economic Co-ordination Committee (ECC) of the Cabinet, sources in the Ministry of Industries and Production (MoI&P) told Business Recorder.
"We are being informed that Commerce Ministry is under pressure from the top guns for implementation of a decision of federal Cabinet which has been wrongly recorded and communicated," sources said. A Joint Secretary to the Cabinet, Syed Fayyaz Hussain, said it is clarified that the Cabinet has decided to restore and reconfirm the ECC decision taken on November 4, 2010, as modified by its subsequent decision taken in December 2010.
According to him, the Cabinet Division sees no ambiguity in the decision of the federal cabinet, taken in its meeting on January 26, 2011 and conveyed to the Commerce Ministry. The Commerce Ministry has been requested to implement the federal cabinet decision in letter and spirit. Meanwhile, Commerce Secretary Zafar Mahmood, who is the convenor of the committee on 'rationalising prices of locally manufactured cars', has also written a letter to the new Cabinet Division Secretary Nargis Sethi, saying that it appears that the sequence of decisions taken by the ECC are not being appreciated and decisions that ECC and the cabinet have yet to take are being attributed to these forums.
Nargis had stopped the Commerce Ministry from implementing the decision of the ECC with the arguments that implementation on this decision would hurt the local auto industry. According to Commerce Secretary, it may be recalled that in its meeting held on November 4, 2010 ECC took two decisions. First, it agreed to increase the age of imported used cars from three to five years.
Second, it constituted a committee under the convenership of Secretary Commerce to consider the issue in detail including allowing commercial import of used cars under various other schemes, propose tariff structure and suggest a workable mechanism in this regard. The mandate of this committee also covered proposals in case of motorcycles, trucks, buses and tractors import.
In its meeting on December 7, 2010, the ECC directed that notification with regard to allowing import of used cars increasing their age from three to five years should be issued. Regarding the pending work of the committee, the ECC was informed that meetings were being held and a summary would he submitted. The ECC only directed that in addition to motorcycles, trucks, buses and tractors, the committee should also propose measures regarding three-wheelers.
The Ministry of Commerce notified ECC decision of November 4, 2010 as confirmed on December 7, 2010 with regard to import of used cars vide its Notification No 1113(1)/2010, dated 8 December, 2010. This notification was withdrawn on receipt of instructions from the Prime Minister's Secretariat on December 27, 2010.
"Our understanding is that the cabinet confirmed the ECC decision of November 4 and December 7 2010 in respect of import of used cars only, as it was the only decision taken by the ECC," said Secretary Commerce, in a letter to the Secretary Cabinet Division.
According to Secretary Commerce, the ECC has yet to take a decision regarding other vehicles, new entrants auto policy and related issues of depreciation, etc. That is why Ministry of Commerce submitted a summary dated January 15, 2011 covering these dimensions of the issue and the summary was on the agenda of the ECC meeting scheduled for February 1, 2011.
The ECC in its meeting on February 1 was informed that the ECC decision was earlier put on hold by the Prime Minister. The ECC noted the position, but did not give any further instruction in this regard. Sources said that Secretary Commerce was present in the cabinet meeting on January 26, 2011 and it is felt that the cabinet restored and confirmed the ECC decision of November 4/December 7 2010 only in respect of the import of used cars, as that was the only decision taken by the ECC, and that other related matters are pending for decision with the ECC.
Commerce Secretary was of the view that Cabinet Division may review its letter of January 31, 2011, but according to insiders, Cabinet Division is not ready to go on back foot. "If Commerce Ministry and Cabinet Division fail to resolve this issue, the cabinet may take it up again in its next meeting," said an official.