KARACHI: The new auto policy is designed to maintain a balance between import and exports of the auto sector in Pakistan, said Federal Minister for Industries and Production Makhdoom Khusro Bakhtyar.
All those manufacturers, who import the Completely Built Unit (CBU), Completely Knocked Down (CKD) kits and other spare parts, would have to export their vehicles or spare parts as per their imports quantity or import bill, he said during a press conference.
The minister said, “In a bid to boost the auto sector’s exports during the current fiscal year this decision has been taken. It will also help to maintain ‘Balance of Payment’ of Pakistan.
“The auto manufacturers would be bound to deliver vehicles to their customers in 60 days and in case of any delay the manufacturer will be charged with a penalty up to Rs50,000 to Rs200,000 and will also have to pay back KIBOR plus 3% to customers on the total deposit amount,” the minister claimed.
Through the new auto policy 2021-26, the government has prioritised electric and hybrid vehicles in Pakistan. The government’s focus would be on increasing the production of small vehicles to enhance Pakistan’s Large Scale Manufacturing (LSM), the minister said.
Regarding prices of new vehicles, the government would issue an SRO in a couple of days, the minister said adding that the new policy would bring down prices of small cars up to Rs100,000 to Rs145,000.
The new policy will create more than 0.375 million jobs in Pakistan while the government has a plan to enhance production to 0.5 million vehicles by the end of 2023-24.
To discourage on-money on vehicle purchase, the minister said that the first owner of the vehicle who booked it would be entitled to register the car on his name with the excise department. The minister claimed that the auto sector is paying Rs300 billion in taxes.
He further claimed that the government is also making policy to further relax auto financing in Pakistan which would not only create demand for new vehicles but it would also help to enhance the productions of vehicles.
The assemblers and their dealers were waiting for the new directives of the government regarding the pricing of the new vehicles despite the issuance of Finance Bill 2021 making budgetary measures effective from July 1.
The government had cut Federal Excise Duty (FED) on all vehicles. For cars up to 3,000cc by 2.5pc while on vehicles from 660cc to 1,000cc the FED had been abolished. The GST had been cut to 12.5pc from 17pc for cars up to 1,000cc.
For 1,001cc to 2,000cc vehicles, the FED was decreased to 2.5pc from 5pc and for 2,001cc to 5pc from 7.5pc. The government has also cut ACDs on all vehicles from 7 to 2pc and its notification has been issued on June 30, 2021.