MOTORCYCLE PRODUCTION IN PAKISTAN 2011-12

Published on page# 20 & 21 in August-2012 issue of MOBILE WORLD Magazine 

www.mobileworld.com.pk/motorcycleproduction2011-12.html

Custom Targets Motorcycle Industry

EDB activates Euro-II issue

Custom Sabotage Exports

M/s Sitara Auto Impex Karachi exported two consignments containing 180 units of 70cc Sitara Motorcycles to Afghanistan on 29-07-2011 and 12-10-2011 respectively. Later, M/s Sitara Auto Impex imported 500 Kits of 70cc Motorcycles in CKD condition claiming adjustment and release of 180 Kits free of customs duty out of the aforesaid 500 Kits in terms of Serial No.13 of SRO 656(I)/2006 dated 22-06-2006

This is well known fact that the country is suffering from huge local and foreign debts crisis and a big trade imbalance has created scarcity of foreign exchange reserves. In these circumstances there is no alternative except the use of all resources to increase export and reduce import. However, the bureaucratic hurdles by customs authorities and the FBR are discouraging export culture in the country just to accelerate economic crisis and making situation from bad to worse. Following is a case example of working by the Customs authorities.

M/s Sitara Auto Impex Karachi exported two consignments containing 180 units of 70cc Sitara Motorcycles to Afghanistan on 29-07-2011 and 12-10-2011 respectively. Later, M/s Sitara Auto Impex imported 500 Kits of 70cc Motorcycles in CKD condition claiming adjustment and release of 180 Kits free of customs duty out of the aforesaid 500 Kits in terms of Serial No.13 of SRO 656(I)/2006 dated 22-06-2006.

In order to ascertain the bonafide of claimed exemption Afzaal Ahmad Wattoo, Assistant Collector, Model Collectorate of Customs Appraisement, Karachi wrote a letter on 9th March 2012 to Deputy Collector of Customs (HQ), Quetta requesting to confirm the genuiness of the exports and to check whether rebate against the aforesaid two exported consignments was claimed/ sanctioned.  

Meanwhile, the Assistant Collector of Customs Appraisement asked the exporter to furnish the documentary proof that:

i. no duty drawback was claimed/ received against export goods declaration GDs No.3765 dated 12-10-2011 and GD No.1080 dated 29-07-2011,

ii. Foreign Exchange Repatriation certificate issued by the bank, and

iii. The copy of L/C along with the Form-E.

On 21st March 2012, Muhammad Hadi, Superintendent, Custom House, Chaman, issued his confirmation that both the shipping bills were checked with his office record and found to be correct.

However, on 5th April 2012, the Deputy Collector of Customs Appraisement, Karachi informed Deputy Collector Customs, Chaman that the reply of the query of his office regarding rebate claimed/ sanctioned against two Shipping Bills bearing numbers 3765 and 1080 were found unanswered. "It is therefore, again requested to confirm the same enabling this Collectorate to finalize the instant case. An expeditious reply will be highly appreciated as consignment is held up for want of aforesaid confirmation and heavy demurrage is incurring in the goods. Matter may be treated as most urgent," the Deputy Collector concluded.

On 4th May 2012 the Deputy Collector, Custom House, Chaman wrote a letter to Assistant Collector (Rebate & Refund), Quetta, requesting that verification regarding sanctioning of rebate against these shipping bills may be sent to Deputy Collector Appraisement under intimation to this office.

On the other hand, M/s Sitara Auto Impex on 8th May 2012 informed the Assistant Collector of Custom Appraisement Group-VII, Karachi that the documents demanded by him were already submitted prior to the issuance of his letter and these all were available on record. Thereafter, he had issued a letter bearing No. SI/MISC/604/2012-4 dated 05-04-2012 to the Deputy Collector of Custom, Custom House Chaman for verification of claim refund admissible against GD No.3765 dated 12-10-2011 and GD NO. 1080 dated 29-07-2011.

The exporter disclosed that the matter of Rebate Verification was in domain of Assistant Collector, Rebate Quetta, but Karachi customs wrongly addressed the letter to Assistant Collector Chaman, which delayed the matter at length. "Now, the Assistant Collector Chaman had forwarded his letter to Assistant Collector Rebate Quetta vide C.No. CHC/EXP/VRF/GD/2012/5608 dated 04-05-2012, since then the matter was lingering without our default," M/s Sitara Auto Impex said.

They further added that without prejudice to the above it may further be appreciated that on account of paper work, verification and re-verification we are suffering a lot on account of illegal payment of demurrage and other charges which we are not liable to be paid/ borne by us under the law.

"You are requested to kindly issue a letter addressed to the learned Assistant Collector, Rebate and Refund, Custom House Quetta with the copy to the undersigned so as we may pursue the case directly on presentation of the copy endorsed to us. We hope that your honor will appreciate our genuine difficulties and issue the letter at an earliest," the letter concluded.

The next day Sitara Auto addressed another letter to Assistant Collector of Customs Appraisement Karachi, saying that they have exported 180 units motorcycles to Afghanistan, the confirmation of the export has been duly verified by the Assistant Collector, Custom House, Chaman vide his letter bearing No.CHC/EXP/VERF/GD/08-10/4770 dated 21-03-2012.

"We have imported 500 CKD Kits of 70 CC Motorcycles under SRO656(i)/2006. These Kits are lying with you unreleased for the reason that the verification of the export and its rebate is not available on the file, though one part of the verification is duly verified that we have already exported 180 units to Afghanistan. It may kindly be appreciated that due to non clearance of the 500 CKD Kits lot of demurrage and other expenses are payable by us without any fault" they said.

Finally they suggested that aforesaid Units may kindly be released on submission of Bank Guarantee/ Pay Order. The aforesaid Bank Guarantee or Pay Order may kindly be encashed in case if it is proved that they have already taken rebate on the exported motorcycles.

The most interesting fact is that rebate of about Rs4.5 lac was yet not paid or adjusted by the custom authorities while the Exporter was compelled to get release its imported goods after paying an additional amount of Rs6 lac towards demurrage just because of delaying tactics by Customs on May 22, 2012.

-Nasir Mahmood,

nasirmahmood05@yahoo.com

-Published on page#-19 & 20 in June-2012 issue of MOBILE WORLD Magazine

Euro-II implementation deadline nears

The Smoke, Carbon Monoxide and Noise parameters were to be implemented on all imported and new models of locally manufactured petrol vehicles w.e.f. 1st July 2009, while the existing models of petrol driven vehicles locally manufactured were directed to immediately switch over to Euro-II emission standards but not later than 30th June 2012

According to Ministry of Environment's S.R.O.72(KE)/ 2009, 30th June 2012 is the deadline fixed for all types of vehicles in Pakistan for switching over to Euro-II emission standards. 

The S.R.O. 72(KE)/2009 dated 16th May 2009, Karachi was published in the Gazette of Pakistan on Tuesday, August 18, 2009. 

It was issued in exercise of the powers conferred under clause (c) of sub-section (I) of section 6 of the Pakistan Environmental Protection Act, 1997 (XXXIV of 1997), under which the Pakistan Environmental Protection Agency, in anticipation of approval by the Pakistan Environmental Protection Council had directed some amendments in its Notification No. S.R.O.742 (I)/93, dated 24th August 1993.

These amendments were issued under the title of National Environmental Quality Standards for Motor Vehicle Exhaust and Noise. 

These standards were issued with immediate effect for In-use Petrol Vehicles like Passenger Cars, Light Commercial Vehicles, Motor Rickshaws and Motorcycles etc. including Heavy Duty Diesel Engines and Large Goods Vehicles.   

These Smoke, Carbon Monoxide and Noise parameters were to be implemented on all imported and new models of locally manufactured petrol vehicles w.e.f. 1st July 2009, while the existing models of petrol driven vehicles locally manufactured were directed to immediately switch over to Euro-II emission standards but not later than 30th June 2012.

What is EURO II Emission Control Unit (ECU) & how it works?

With the advancement and development of universal modern industry, the problem of environmental pollution is getting worse. Besides emission of industry, emission pollution of vehicles and motorcycles is increasingly noticed. The corresponding emission rules of law are also increasingly strict. From 2009, the minimum emission value of two-wheel motorcycle is regulated in Pakistan by EPA (Environmental Protection Agency, of Pakistan).

Exhaust pipe emission includes CO (Carbon Mono oxide), HC (Hydro Carbons), NOx (Nitrogen Oxide) and CO2 (Carbon Dioxide). Emission from vehicles are controlled through as per standards of Pakistan Environment Protection Agency (PAK-EPA) under clause (e) of session 6(1) of the Pakistan Environment Protection Act, 1997, and with the approval of the Pakistan Environment Protection Council, established national environmental quality (NEQS) as follows:

Structure and working principle of EURO-II (emission control unit, ECU):

Emission control unit mainly includes air pump, air cleaner, connecting pipe and accelerant-catalyzing device. The air pump, in accordance with the principle of engine ripple control, controls the air flow volume. Fresh air could be inhaled into the exhausted pipe and mixed with the un-burnt CO, HC which exhausted from combustion room. This device could help to reduce the exhaust emission of motorcycle and to reach the Euro-2 emission standard.

With reference to Motorcycle Industry in Pakistan so far seven (7) different models were already converted on Euro-II standards that were:-

1.     Ravi Premium R1-70cc

2.     Ravi Hamsafar-70

3.     Ravi Piaggio Storm 125cc 

4.     Honda CG-125 Deluxe

5.     Honda CD-100

6.     Suzuki Sprinter ECO

7.     Yamaha YD-100 Junoon 

-Staff Correspondent

-Published on page#-10 in May-2012 issue of MOBILE WORLD Magazine

Government amends definition of 'New Entrant' for Automobile Industry

The additional customs-duty leviable under this notification shall not be charged on sub-components and components, imported in any kit form by an assembler or manufacturer declared to be a new entrant by the Engineering Development Board (EDB) for the vehicles specified in the said Table for a period of three years from the start of assembly or manufacturing of respective vehicles

The Ministry of Finance, Economic Affairs (Revenue Division) issued S.R.O. 1098 (1)/2011 on 16th December, 2011. The notification said "In exercise of the powers conferred by sub-section (5) of section 18 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the following further amendment shall be made in its Notification No. S.R.O. 693(1)/2006, dated the 1st July, 2006, namely:-

In the aforesaid Notification, after the TABLE, the following proviso shall be added, namely,-

"Provided that in line with Auto Industry Investment Policy (AIIP) of the Auto Industry Development Programme (AIDP) approved by the Economic Coordination Committee (ECC) of the Cabinet in Case NO. ECC-168/13/2007 dated 13.11.2007, the additional customs-duty leviable under this notification shall not be charged on sub-components and components, imported in any kit form by an assembler or manufacturer declared to be a new entrant by the Engineering Development Board (EDB) for the vehicles specified in the said Table for a period of three years from the start of assembly or manufacturing of respective vehicles, subject to following conditions, namely:-

(i) The new entrant assembler or manufacturers shall chalk out a plan for progressive manufacturing of the vehicles spreading over a maximum period of three years within which he shall catch up with the localization or indigenization level of respective vehicles, as approved by Auto Industry Development Committee (AIDC) of the EDB;

(ii) The continued non-levy of said additional customs-duty shall be contingent upon the achievement of progressive annual indigenization as determined by AIDC of the EDB. In case of any material deviation by the new entrant, the AIDC shall determine the stoppage or withdrawal of the incentive of non-levy of said additional customs-duty, allowed as such, retrospectively;

(iii) The new entrant shall abide by all the terms and conditions laid down in the separate notifications issued by the Ministry of Industries and FBR for assembly or manufacturing of the said vehicles under Auto Industry Development Programme (AIDP) and Tariff Based System (TBS);

(iv) The additional customs duty shall be levied on the sub-components and components which become indigenized by the New Entrant assembler or manufacturers, in accordance with the said plan for progressive manufacturing; and

(v) The term 'new entrant' shall bear the same meaning as declared or notified by the Ministry of Industries."

-Published on page#-8 in December-2011 issue of MOBILE WORLD Magazine