The Revenue Division has proposed incorporation of new Pakistan Customs Tariff (PCT) code in SRO 693(1) 2006 to collect additional customs duty on localized parts of SUVs, well-informed sources told Business Recorder. Giving the background, the sources said, Ministry of Industries and Production on May 9, 2019 recommended creation of new Pakistan Customs Tariff (PCT) code for Sport Utility Vehicles (SUVs) for engine capacities 1001 cc to 1500 cc and 1501 to 1800cc in the first schedule to the Customs Act, 1969 and incorporation of this PCT code in SRO 693(1) 2006 issued on July 1, 2006 for levy of Additional Customs Duty (ACD) on those important parts of these vehicles which have been localized.
This levy is in line with the existing localization plan as applicable for SUVs for engine capacities 1801 cc to 3000 cc under SRO 693(1)2006 and is already being paid but not separately identified due to non-availability of separate PCT code.
Accordingly, the Revenue Division has proposed that new PCT codes, as created in the Pakistan Customs Tariff through the Finance Act, 2019, may also be incorporated in SRO 693(1) 2006 so that levy of additional custom duty collected on those parts of SUVs of engine capacities 1001 to 1500 cc to 1800 cc which have been localized, may be appropriately accounted for under separate PCT codes.
According to Engineering Development Board (EDB), M/s Honda Atlas Cars (Pakistan) Ltd, Lahore through a representation approached the EDB with the request to create new HS codes for 1500 cc SUVs which was forwarded to FBR through Ministry of Industries and Production for the budget 2018-19. However, the matter remains unresolved at the end of FBR.
As the Auto Development Policy 2016-21, the new investors already granted Greenfield status including M/s KIA Lucky Motors, M/s Master Motors Ltd, M/s Sazgar Engineering, M/s A;-Futaim (Renault), etc, intend to introduce SUVs in 1500cc to 1700 cc category in near future. In case the matter remains unresolved, this will have adverse impact on their confidence and ultimately on their investment commitments/business plans.