The Commerce Ministry has reportedly refused to implement the decision of the Cabinet regarding increase in age of re-conditioned vehicles, claiming that the decision is contrary to the proposal of the Ministry, sources in Cabinet Division told Business Recorder.
According to the minutes of the Federal Cabinet meeting held on January 26, 2011, the Cabinet reconfirmed the minutes of the Economic Co-ordination Committee (ECC) of the Cabinet pertaining to permission for import of five-year old re-conditioned cars, motorcycles, trucks, buses and tractors, and directed immediate implementation of the decision.
The Cabinet''s decision is being hailed by car importers who have already invested huge amounts in booking of cars by purchasing passports at very minimal rates from overseas Pakistanis. However, local assemblers are portraying the decision as anti-investment and anti-industry.
The Commerce Ministry argues that the Cabinet''s decision may be out of context, or the Cabinet Division did not record the minutes accurately, which has created confusion.
Sources said that Commerce Ministry has written a letter to Joint Secretary, Cabinet, Fayyaz Hussain, seeking clarification on the decision which may hit local auto industry in case of any mistake in recording the decision of the Cabinet.
Giving background of the case, the Commerce Ministry said that the ECC in its meeting held on November 4, 2010, had taken the decision to increase the age limit of import of cars under baggage and gift schemes from three to five years, and constituted a committee to review the issue of allowing commercial import of cars under various schemes, and suggested the following workable mechanism:-
"The ECC of the cabinet considered the summary dated 20th September, 2010, submitted by Ministry of Industries & Production (MoI&P) on rationalising the prices of locally manufactured cars and while agreeing to increase the age of imported used cars from 3 years to 5 years, constituted a committee comprising Secretary Commerce (Convenor), Finance, Industries & Production and Chairman Federal Board of Revenue, to discuss this issue in detail, including allowing commercial import of used cars and under various other schemes, proposing tariff structure and suggest a workable mechanism. Mandate of this committee will also cover motorcycles, trucks, buses and tractors".
Following the ECC decision and subsequent direction in its meeting held on December 7, 2010 a notification allowing import of cars up to five years old under baggage and gift Schemes was issued.
Later, in pursuance to the directions of the Prime Minister Secretariat to put on hold the decision to increase age of cars till reconsideration of the issue, another notification withdrawing the facility of import of cars not older than five years was issued.
The Ministry of Commerce, in pursuance of the Prime Minister''s directive, submitted a summary to the ECC on January 15, 2011, which was deferred due to paucity of time.
"Following the meeting of the Cabinet held on January 26, 2011, the decision was received from the Cabinet Division for implementation. However, the Cabinet Division has directed the Ministry of Commerce through the same letter to implement the decision of the ECC of the Cabinet. The original decision taken by the ECC pertains to only increase the age limit of cars from 3 to 5 years, which was subsequently withdrawn in December," sources quoted Commerce Ministry as saying in its letter.
The Commerce Ministry maintains that the Cabinet Division should clarify whether in its meeting held on January 26, 2011, it had decided to increase the age of ''all vehicles'' including cars, motor cycles trucks buses and tractors under the baggage and gift schemes from 3 to 5 years; or the decision was confined to restoring age limit of cars from 3 to 5 years, as was earlier decided by the ECC.
Cabinet Division, sources said, is expected to reply to the Commerce Ministry''s letter in a day or two, after which a fresh notification would be issued.