Engineering Development Board (EDB) has asked Federal Board of Revenue (FBR) to withdraw Regulatory Duty (RD) on locally-manufactured automotive parts, official sources told Business Recorder. The organisation which had been about to be dissolved due to rampant corruption was recently rescued by the Prime Minister's Advisor on Commerce, Textile, Industries and Production and Investment, Abdul Razak Dawood but has yet to be restructured.
A Deputy General Manager has written a letter to Secretary Tariff-II of Federal Board of Revenue, stating that he has been directed to state that since implementation of Regulatory Duties (RDs) vide various SROs i.e. SRO 1265(I)/2018 of October 16, 2018 currently in field, a number of auto parts manufacturers availing the concessions under SRO 655(I)/2006 have approached EDB on adverse impact of RD since their input costs have drastically increased.
According to him, RD has been enhanced to their disadvantage compared to prices of similar parts imported at additional duties by OEM's under SRO 656(I)/2006.
The EDB letter, a copy of which is available with the newspaper, says that all auto parts manufacturers are SMEs and do not have the capacity to sustain losses for an extended period, which may result in closure of their businesses and the same auto parts, if imported by OMEs at cheaper prices, would multiply the negative impact on economy.
Moreover, on the issue of RDs a meeting was convened in Ministry of Industries & Production on the request of Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) which was also attended by representatives of FBR and concerned public sector stakeholders. The letter says that while concluding the meeting Secretary, Industries & Production recommended FBR to exclude SRO 655(I)/2006 from the ambit of regulatory duty. Further, the matter was also discussed in 27th meeting of Auto Industry Development Committee (AIDC) held on November 28, 2018 wherein the committee unanimously recommended for withdrawal of regulatory duties on input materials imported under concessionary regime of SRO 655 issued in 2006. Citing the discussion of the committee, EDB, in its letter has requested FBR to take immediate remedial measures to rescue local auto parts manufacturers and strongly recommended exclusion of SRO 655(I)/2006 from the ambit of regulatory duties imposed in SRO 1265(I)/2018.
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