Custom House Karachi through its Ruling U/S 25-A No. 310 dated 30-04-2011 issued Customs (C&F) values for Aluminum Alloy Wheel and Wheel Rims of all vehicles at the rate of US$ 3.38/Kg for China origin and US$ 4.00/Kg for all other origin. Similarly value for the Wheel Rim (other than alloy) of all the vehicles imported from China was fixed at US$ 0.43/Kg or less than half dollar per Kg. for all other origin too
Rampant corruption in Custom Department has made the life of local assemblers of Motorcycle Industry miserable that has badly affected not only the national exchequer but general buyers of Motorcycle Industry in the country.
According to details the Directorate General of Customs Valuation, Custom House Karachi through its Ruling U/S 25-A No. 310 dated 30-04-2011 issued Customs (C&F) values for Aluminum Alloy Wheel and Wheel Rims of all vehicles at the rate of US$ 3.38/Kg for China origin and US$ 4.00/Kg for all other origin. Similarly value for the Wheel Rim (other than alloy) of all the vehicles imported from China was fixed at US$ 0.43/Kg or less than half dollar per Kg. for all other origin too.
Earlier, the Directorate General of Customs Valuation, through its ruling No.296 dated 11-03-2011 U/S 25-A announced to fix the value of High Tensile screw & Bolts (whether with or without Nuts and Washers) imported from China at the rate of US$ 1.1/Kg.
Similarly, on 23-06-2011 under ruling No.345, the value for about 17 different Tractor Parts and Components of Chinese origin was determined between US$ 1.50 to 3.00/Kg. The list of these parts included Piston set valued at $2.5/Kg and Ring set @ $3.00/Kg while the value of all remaining parts including Cylinders, Cylinder Blocks, Cylinder Heads, Liners, Connecting Rods, Rear End Housing, Fuel & Oil Pumps, Gear Sets, Gaskets & Joints, and Crank Shaft Assembly etc was ranged from $1.50 to 1.70/Kg only.
In contrast to above all, the same Directorate General of Customs Valuation, Custom House Karachi issued its Ruling No.333 on 07-06-2011, which determined the Customs Value of Motorcycle Parts and Components of Chinese Origin amazingly at the highest side. For example the Aluminum Crank Case (R) valued @ US$ 5.45/Kg and Crank Case (L) at $5.87/Kg, Carburetor valued $13.00/Kg and CDI Unit $13.54/Kg. Similarly, Crank Case Covers of left and right again made of aluminum were fixed at the rate of $5.45 and $5.15/Kg respectively.
In addition to this, Rectifier Regulator was valued at $10.20/Kg, Insulator Carburetor $13.60/Kg, Spark Plug $6.61/Kg, Ring Piston Top $10.00/Kg, Spring Clutch Lever $11.00/Kg, Valve Inlet $16.42, Oil Through $25.00, Cover Cylinder Head right side $29.74, and Cover Cylinder Head Top $33.66/Kg etc.
Muhammad Sabir Shaikh, Chairman Association of Pakistan Motorcycle Assemblers (APMA), commenting on this situation said that Suzuki motorcycle has reduced prices of all its models and variants and the other two brands, Honda and Yamaha, were also in line to announce new reduced prices. But on the other hand assemblers of Chinese bikes are unable to do so due to high handedness of customs authorities and malfunctioning by FBR just to target the local Motorcycle industry which is the cheapest means of transportation for general public.
Instead, he said that Assemblers were considering increasing the prices of Chinese motorbikes, but hesitant to do so because of depressed market conditions. The prices of Chinese bikes will be increased gradually in coming months, he warned. Just because Assemblers are not in a position to absorb the increased costs while new ruling of Customs has aggravated the situation. They have no other choice except passing the increased cost pressure to the consumers.
Sabir said though government had announced reduction in General Sales Tax (GST) and removal of the Special Excise Duty (SED), the Pakistani assemblers affiliated with Chinese companies have not revised prices of their products due to latest ruling for Determination of Customs Value of Motorcycle Parts and Components of Chinese Origin, under section 25A of the Custom Act, 1969. The new ruling has made the Chinese parts very much costlier.
The higher valuation ruling was issued by Federal Board of Revenue (FBR) on motorcycle parts imported from China just to stop assembly of low cost Chinese-cum-Pakistani motorcycles. In result, the cost has increased by up to Rs1700 to Rs2000. So the local assemblers are not in a position to reduce prices, Shaikh added.
It may be mentioned here that local motorcycle assemblers had also decided to reduce prices, a few days after local car manufacturers cut prices to pass on the benefit of taxation changes introduced by government in the budget.
Pak Suzuki Motor Company had reduced prices of various variants of its Suzuki Motorcycle with effect from July 1. The reduction in the prices followed cut in General Sales Tax (GST) by one percent and abolition of Special Excise Duty (SED), which was collected at the rate of 2.5 percent.
However, Chinese origin motorcycle manufacturers have not reduced the prices. Suzuki Motorcycle has affected price cuts of Rs1900 to Rs2100. Suzuki Motorcycle Shogun price had fallen by Rs1,900 and the new retail price is Rs74,500. Suzuki Shogun motorcycle price was cut by Rs1,900 and the new price is Rs79,500. Suzuki Sprinter is now priced at Rs71,000 after a drop of Rs1,900. Sprinter ECO is available at Rs67,500 after price decrease of Rs1,900. GS125 price has been reduced by Rs2,100 and the new price is Rs82,500. GS150 is available at Rs88,500 after a reduction of Rs2,100.
-Nasir Mahmood
-Published on page#-11 in July-2011 issue of MOBILE WORLD Magazine.
www.mobileworld.com.pk
