GST evasion by motorbike, auto rickshaws assemblers: EDB suggests centralisation of registration of vehicles

To check malpractices of the assemblers of two- and three-wheelers in the payment of general sales tax, the Engineering Development Board (EDB) has suggested centralisation of registration of vehicles so that real production data could be determined.
At the same time, EDB has also initiated an inquiry to check the production data of locally produced bikes and rickshaws as it believes that the assemblers are not providing the correct production data. According to 'Industrial Bulletin', an in-house journal of EDB, it has asked the excise and taxation departments of all the four provinces to provide details about the company's name and its brand concerning the two- and three-wheelers registered during the years 2009-10 and 2010-11, up to March 31, 2011.
The assemblers, it has come to the knowledge of EDB, produce more than one bike and rickshaw with same engine and chassis number and they sell these motorcycles and three-wheelers in four different provinces and pay general sales tax on one bike and rickshaw.
The EDB in a letter has informed all the four provincial excise and taxation departments that certain assemblers of 2-3 wheelers are procuring components from illegal sources, and misreport their production/sales.
It had been noticed that certain unscrupulous assemblers had been found involved in getting their products registered with provincial authorities against invalid/bogus manufacturing certificates, purportedly issued by the EDB. This practice is not only affecting the genuine assemblers but also defeating the regulatory regime and depriving national exchequer of its legitimate revenue.
In order to put an end to the illegal assembly of bikes, and consequent loss to the national kitty, the EDB has established a database to maintain and reconcile the data of production and sales of bikes to ensure proper payment of taxes and duties. The assemblers are allocated a quota of completely knocked down (CKD) kits for import under concessionary regime for assembly of vehicles during a year, based on the production of previous year.
At the end of each fiscal year, the assemblers are required to submit the record of inputs used for the assembly of bikes and rickshaws during the preceding year. Meanwhile, a comprehensive policy paper on the 'national engineering export development strategy' (NEEDS) will be presented on the measures undertaken by EDB for export development and increasing competitiveness of the local industry to the Prime Minister for final approval.
This was disclosed during a meeting with the visiting World Bank mission on Trade Competitiveness. The EDB will assist the World Bank in collecting data about leading industrial sectors of Pakistan for its comprehensive study on competitiveness of the industrial sectors of the country.
The mission, headed by Nihal Pitigala, senior trade economist, was given a detailed presentation on the initiatives undertaken by the EDB for giving international exposure to the engineering industry of Pakistan by way of taking them to the world's most famous engineering trade fairs and exhibitions, and today many industries are reaping the benefits of this exposure. The CEO of EDB, Aitazaz A Niazi, informed the mission that EDB has identified 20 sectors for export development, and work has been initiated to remove the bottlenecks in the development of surgical instruments, fans and cutlery sectors.
The EDB is interacting with various other organisations, like Tevta, BSF and NPO, for capacity building, technology upgradation, branding, franchising, etc, in these sectors and support from various donors/developmental agencies, like PUM, SES, CBI, etc, shall be sought to provide foreign experts through EDB's regular programs.