Car manufacturers paid Rs2bn to consumers in one year, NA told

ISLAMABAD: The car manufacturers have paid around Rs2 billion to consumers in the last one year owing to late delivery of vehicles.

This was stated by the representatives of Honda and Toyota during a meeting of the National Assembly’s Standing Committee on Finance, which was held under the chair of MNA Faizullah on Thursday.

The committee discussed in detail matters pertaining to charging of extra money from the consumers in the name of “own money” as well as late delivery of vehicles by the local manufacturers and assemblers.

The Ministry of Industry and Production joint secretary said the committee has been receiving complaints regarding late delivery of vehicles and that it is considering various options to curb this practice.

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“The auto policy bounds the manufacturers to provide vehicles within two months from the time of booking and if they failed to hand over the vehicle, then, according to the policy, manufacturers have to pay money up to @KIBOR+2,” the ministry noted.

A Federal Board of Revenue (administration) member disclosed that a Karachi-based dealer had booked 10,000 vehicles from a manufacturer during the last five years. “After collecting the required data, we have sent the notices to them. FBR’s intelligence and investigation unit would give a detailed briefing in this regard in the next meeting,” he added.

The representatives of Honda and Toyota informed the committee that they have paid around Rs2 billion to consumers on late delivery of vehicles. “We actually had an enormous clientele last year which is why we could not deliver the cars on time. We have enhanced our production capacity and our back orders have now reduced to 4,000. We can deliver the vehicles on 25 days production capacity,” they stated.

The representatives said investors are creating an artificial shortage in the market only to benefit from the premium (own money) system. “We are working hard to get rid of the premium system and in this regard, we are also investing money on awareness campaigns and workshops.”

The committee chairman lamented that the quality of cars is deteriorating with the passage of time, adding that companies are not following the safety standards that are in place in the developed world.

Benami property and offshore accounts

The committee also discussed the matter of benami properties and offshore accounts.

The FBR officials told the committee that they have completed the investigation against 400 people involved in Panama case but are unable to find the embezzled money. The department has provincially filed 15 cases worth Rs6.5 billion and the names in these cases have been kept secret.

Committee member Ayesha Ghous Pashas asked the FBR officials about the other people listed in corruption cases as “we only receive information about the cases of politicians”.

Refusing to share the details, the FBR chairman said the department has identified 8,000 people with benami transactions and it will confiscate the accounts if ownership of these accounts is not proved.

The committee chairman expressed dismay over the briefing of the tax department, saying that he will summon a special meeting and call the representatives of other institutions who are investigating the cases.

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