A noticeable number of used trucks and commercial vehicles are entering the local markets under various schemes like those of gift and transfer of baggage due to relaxation in the import policy, an official of PAMA said. Under 'Special Purpose Vehicle PCT 8705.9000', sprinkler lorries and water bowsers are being imported and converted into trucks and lorries, he said, on the condition of obscurity.
The statistical data shows that the import has been dramatically increased since last couple of years but no action has been taken so far to stop or at least monitor the system of import. During the last two years, there has been a large increase in import under this scheme because of no age limit of vehicle, no emission standard (Euro-III) condition.
Nearly all sort of the vehicles imported under this scheme could easily be manufactured in Pakistan, but people import these trucks and lorries at discounted price and sell the vehicle in parts, for instance, water tank, pumps chassis, the PAMA official said. He claimed that the phenomenon has jeopardised the local industry as the number of new vehicles produced locally every year is around 5,000, while the number of second hand vehicles imported under PCT is around 7,000.
The invalidation of import under this scheme will portend well for the industry, which has already been hurt by sudden removal of zero rating of general sales tax. The number of trucks imported has increased to 7,476 units in July-May 2010-11 under various schemes and 7,050 units under PCT 8705. Out of them, 6,903 units are specialised vehicles, which include sprinkler lorries and water bowsers.
Under PCT 8705.9000, there is no age limit, no emission standard applicable, and most important is that these vehicles are very easily converted into trucks after removal of water tanks and sprinkle system installed on them. Throughout the country, there are hundreds of fabricators who make such bodies as per customers' requirements, claimed a report prepared by car manufacturers. Local assemblers said that due to this, the share of local production in the market is continuously decreasing and imported vehicles are gaining more ground, which ultimately forces the organised sector to close down their setup.
Not only does such closure shake the confidence of foreign investors, but also leads towards massive unemployment, they said. In 2009-10 trade policy, Ministry of Commerce eliminated the age limit condition for import of used trucks and buses and introduced the 'remaining life concept' for the imported used vehicles and at the same time Euro III emission standard became mandatory in certain cases.
This Euro III emission condition plays a vital role in decline of import of used vehicles. But this condition is not implemented in overall basis, thus providing another area from where one can import used vehicles without much difficulty, local manufacturers said.
They demanded removal of sprinkler lorries and water bowsers from Special Purpose Vehicle category; depreciation reduction to one percent and not more than twenty four percent (accumulated) in any case; restoration of condition of registration in the name of applicant at least one year prior to departure; restoration of the requirement for attestation of registration documents by the Pakistani embassy. They also recommended in the report that all vehicles imported under any scheme should be Euro-III compliant. Age limit for old and used vehicles imported under any scheme should not be more than three years for trucks and buses.-PR
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