Auto industry’s duty removal demand


THE auto industry has reportedly called for abolishing the Additional Customs Duty (ACD) on import of spare parts in the upcoming budget.

Currently the auto industry is paying seven percent on the imports of spare parts.

In addition, it has called for giving the same incentives in the hybrid vehicle policy to the auto sector which the government has announced in the electric vehicle policy.

There is no denying that the auto industry should be facilitated and supported in order to attract more entrants in the market.

However, if it is demanding concession in taxes including the CAD, then the benefit of it must also reach the customers in the form of reduction in the prices of vehicles.

Rather it will be far more appropriate if the government gives incentives to the local production of spare parts as it will really give a boom to the industry and also create job opportunities.

Unfortunately our cars are poorly built, lack critical safety features and are relatively more expensive than comparable models around the world.

AT present there is no official body to inspect and regulate standard of vehicles being produced in the country.

Even the Pakistan Standard and Quality Control Authority (PSQCA) has not been able to formulate or check the quality standard for vehicles being manufactured in the country.

In fact most recently when the Ministry of Science and Technology announced to start the process of establishing standards for auto parts in the country, interestingly auto sector stakeholders expressed doubts that Pakistani standards would be higher than those formulated by Japan, Korea and the European Union.

This really indicates the intent of this industry that it wants to pocket profits but not ready to produce quality products.

We will, therefore, suggest the new auto policy being prepared by the government must strictly deal with the quality and safety issues related to the vehicles. There must also be a check on their prices.

In fact there should be at least one vehicle testing lab in the country either operated by the public sector or through a third party, to certify the quality and safety standards of vehicles.