Lahore Chamber of Commerce and Industry (LCCI) President-elect Malik Tahir Javed has urged the government to save the auto parts manufacturers of Pakistan who are in deep trouble because of adverse conditions. Malik Tahir said that auto parts manufacturers are one of the largest job and revenue providers in the country but various challenges including high input cost and duties and taxes on import of raw materials have put its survival at stake.
He demanded that the regulatory duty on import of industrial steel materials by the auto parts sector should be withdrawn immediately as these are not being produced or manufactured domestically.
He said that the regulatory duty at the rates of 5 percent to 15 percent on steel import was first imposed in January 2015. Next year, the regulatory duty was increased from 15 percent to 35 percent which heavily increased the input cost of the value-added sectors producing fine quality auto parts and engineering products.
He said though the plea is being taken that regulatory duty has been imposed on the import of industrial steel materials to protect the local steel industry but outcomes are terrible as local steel industry mainly produces construction steel. Resultantly large scale manufacturing sectors like auto parts have been pushed to the wall.
“However, the affected PCT codes were common for raw materials allowed to be imported by the auto parts industry at concessionary duty, because these materials were not produced by the local steel industry (who have been protected through levy of RD). This fact has also been duly recognized in the new Auto Development Plan (ADP) document, where no regulatory duty has been imposed on raw materials imported by auto industry, provided they are not manufactured locally,” he added.
Javed urged the government to immediately withdraw regulatory duty on import of industrial steel materials by the auto parts sector as it is nothing else but to discourage the auto parts manufacturers and to encourage the smuggling. He said if the regulatory duty on import of steel by the manufacturers of auto parts vendors is not withdrawn, this will causing increase in cost of manufacturing auto parts and auto parts vendors will not be able to supply parts and other material to the original equipment manufacturers.