Low valuation of imports hitting tractors’ parts industry hard: Paapam

LAHORE: The Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam) has stressed the need for providing level-playing field to the tractors’ auto parts manufacturers through restricting import of those parts which are being manufactured in the country, as under-invoicing and low valuation of imports have been hitting the industry hard.

In a statement issued here Saturday, Paapam senior vice chairman Abdur Razzaq Gauhar invited the attention of the FBR Chairman towards this big issue of lower value determination of imported tractor parts at the Directorate General of Customs Valuations. He said that low valuation of tractors parts imports have adversely affected sales tax, withholding tax, customs duty and Federal Excise Duty and the major reason of less revenue collection is the absence of foolproof mechanism for accurate assessment of duties and taxes at the import stage.

“Paapam appreciates the recent increase in valuation of tractor parts but it is very meager against the values determined for Original Equipment Manufacturers (OEMs) and still below the rates of even raw materials,” he pointed out.

Abdur Razzaq Gauhar said that nominal improvement in valuation of just 5-10 percent parts are meant for only aftermarket and not for tractor assembly and does not affect the tractors price. “Pakistan is a big market of tractor parts but instead of providing incentives to the local industry, the country is being turned into dumping yard of substandard parts from India and China,” he said. He also called for a check on smuggling, which is being done in a number of shapes like under-invoicing, undervaluation of goods, misclassifications, falsification of documents, miss-declaration of country of origin and short landing transit or re-export of goods.

Copyright Business Recorder, 2021