Malik for withdrawal of Regulatory Duty on auto steel import

LAHORE: LCCI President-elect Malik Tahir Javed here Wednesday urged the government to save the auto parts manufacturers of Pakistan, one of the largest job and revenue providers in the country, by ensuring reduction or zero duties/taxes on import of raw materials.

He demanded that Regulatory Duty (RD) on import of industrial steel materials by the auto parts sector should be withdrawn immediately as these were not being produced or manufactured domestically.

He said that regulatory duty at the rates of 5 per cent to 15 per cent on steel import was first imposed in January 2015 and last year, the RD was increased from 15 per cent to 35 per cent which increased input cost of this value-added sectors producing fine quality auto parts and engineering products.

The President-elect said that though plea was being taken that regulatory duty had been imposed on the import of industrial steel materials to protect the local steel industry but outcome was negative as local steel industry mainly produces construction steel. Resultantly, he added, large scale manufacturing sectors like auto parts are now faced with numerous problems.

"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," Malik added.

The LCCI newly-elected President urged the government to immediately withdraw regulatory duty on import of industrial steel materials by the auto parts sector.

He said that if the RD on import of steel by the manufacturers of auto parts vendors was not withdrawn, this would cause increase in cost of manufacturing auto parts and auto parts vendors would be unable to supply parts and other material to Original Equipment Manufacturers (OEM).