ISLAMABAD: The Engineering Development Board (EDB) has requested the Federal Board of Revenue to take back regulatory duty (RD) on domestically produced automotive parts.
Official sources have revealed that Deputy General Manager has sent a letter to Secretary Tariff-II of FBR asking to mention due to implementation of RDs via various SROs, various auto parts manufacturers availing relief under SRO 655 (I)/2006 have asked the EDB on negative impact of RD due to a major rise in their input costs, reports Business Recorder.
As per the letter, the regulatory duty has been raised to the automotive parts disadvantage against prices of similar parts imported at additional duties by OEMs under SRO 656 (I)/2006.
According to the EDB letter, every auto parts manufacturer is a small-medium enterprise (SME) and doesn’t have the ability to withstand losses for a longer duration, which could likely result in a closure of their businesses.
Also, the letter states if the same auto parts are imported by OMEs at cheaper rates would have negative implications on the economy.
A meeting to discuss the regulatory duties was held at the Ministry of Industries and Production (MoIP) on the request of Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), which was attended by representatives of the tax regulator and relevant public sector stakeholders.
Furthermore, the letter states while finishing the meeting, Secretary Industries and Production suggested the FBR exclude SRO 655 (I)/2006 from the purview of regulatory duty.
During the 27th meeting of the Auto Industry Development Committee (AIDC) held on November 28th, the committee unanimously proposed for taking back of regulatory duties on input materials imported under a concessionary regime of SRO 655 of 2006.