Six assemblers of motorcycles, auto-rickshaws: concessionary components'' import stopped

On the recommendations of the Engineering Development Board (EDB), the Federal Board of Revenue (FBR) has stopped concessionary import of components, including sub-components, components, sub-assemblies and assemblies imported in any kit form, by six assemblers/manufacturers of motorcycles and auto-rickshaws.
Sources told Business Recorder here on Monday that the FBR has issued instructions to all Collectors of Customs Model Customs Collectorates (MCCs) to implement the recommendations of the EDB for not allowing concessionary rate of customs duty on the imports made by six assemblers/manufacturers of motorcycles and auto-rickshaws. According to FBR''s instructions, the MCCs should further proceed accordingly as per advice of the EDB.
Sources said that the EDB had informed the FBR about the non-revalidation of manufacturing certificate by six assemblers/manufacturers of motorcycles and auto-rickshaws for 2011-12. Six assemblers/manufacturers of 2/3 wheelers have since assembled the vehicles during the fiscal year 2010-11 without any direct import, as required under SRO.656(I)/2006, their Manufacturing Certificates and lists of importable components have not been revalidated for the current fiscal year.
The EDB had further requested the FBR to direct its field formations not to allow the above named firms any concessionary imports under SRO 656(I)/2006 dated June 22, 2006. The Pakistan Standards and Quality Control Authority (PSQCA) and Provincial Registration Authorities are also being requested not to entertain the products of these firms for registration, besides issuing of CM licences due to non-conformity with the conditions of the regulatory regime, the EDB said.
Sources explained that under SRO 656(I)/2006, the federal government has allowed concessionary rate of customs duty on the import of components (which include sub-components, components, sub-assemblies and assemblies but excluded consumables), imported in any kit form, and direct materials for assembly or manufacture of specified vehicles. One of the conditions of the SRO 656(I)/2006 is that the importer-cum-assembler or manufacturer shall directly import the components as per the lists duly approved by the EDB or shall procure them from a sales tax registered local vendor, manufacturing such components and will maintain records accordingly. On the other hand, certain assemblers/ manufacturers of 2/3 wheelers have not made direct imports as required under SRO 656(I)/2006. These assemblers/manufacturers have purchased under-invoiced goods/kits from commercial importers which is not admissible under the SRO 656(I)/2006. As certain assemblers/manufacturers have not fulfilled the condition of SRO 656(I)/2006, the EDB has imposed penalty on such assemblers/manufacturers and the EDB has not revalidated their Manufacturing Certificates.
Official added that the EDB had requested the FBR not to allow concessionary imports of some assemblers/manufacturers, which failed to fulfil the laid down conditions of the SRO 656(I)/2006. The FBR will not entertain applications of concessionary imports made under the SRO 656(I)/2006 in cases where the EDB has not revalidated their Manufacturing Certificates. Resultantly, such assemblers/manufacturers would not be allowed import kits including sub-components, components, sub-assemblies and assemblies at concessionary rate of customs duty.