EDB targets 2/3 wheeler

The Engineering Development Board (EDB) has advised all the Provincial Secretaries (Excise & Taxation) including AJK and Federal Govt. Islamabad to provide company wise & brand wise data of 2/3 wheelers registered during 2009-10 & 2010-11, in accordance with its format.

Dr. Muhammad Zubair, General Manager (Tariff) EDB in his letter No. EDB/TBS-II/11 dated April 21, 2011 stated that OEMs of vehicles are allocated a quota of CKD kits for imports under concessionary regime for the assembly of vehicles during a year based on the production of previous year; and at the end of each fiscal year, the OEMs are required under the SRO, 656(1)12006 to submit the records of inputs used for the assembly/ production of vehicles during, preceding year.

"It has been noted that certain OEMs of 2/3 wheelers procure components from illegal sources and misreport production/ sales of 2/3 wheelers. Further, vehicles (2/3 wheelers) having the engine & chassis numbers are being registered under duplicate numbers in different cities. It has also been reported that certain unscrupulous assemblers have been found involved in getting their products registered with provincial registration authorities against invalid/ bogus manufacturing certificates, purportedly issued by EDB. This malpractice is not only affecting the genuine assemblers of 2/3 wheelers, but also defeating the regulator regime and depriving national exchequer of its legitimate share," the General Manager alleged.

He added that in order to put an end to illegal assembly/ manufacture of vehicles and consequent loss to the exchequer, EDB has established a database to maintain & reconcile the data of production & sales of 2/3 wheelers to ensure proper payment of taxes & duties chargeable thereon. To enable the Engineering Development Board to accomplish the aforesaid task of national importance & interest, assistance from the provincial registration authorities is solicited. It is accordingly requested to kindly provide the company and brand-wise data concerning the 2/3 wheelers registered during the year 2009-10 and 2010-11 (up to March 31st 2011), on the enclosed format, Dr. Zubair concluded.

Copies of this letter were also addressed to; the Member (Inland Revenue) Federal Board of Revenue, Islamabad, and Chairman, Pakistan Automotive Manufacturers' Association (PAMA), Karachi.

It may be mentioned here that various complaints regarding misuse of the EDB facilities as explained above were already on record with FIA and the Customs Department against local Car, Trucks and Tractor Assemblers but amazingly the EDB authorities had never bothered to initiate any such inquiries or called for collection of data about 4-wheelers, which smears discrimination against 2/3 Wheelers.

-Nasir Mahmood

-Published on page#-08 in June-2011 issue of MOBILE WORLD Magazine.

www.mobileworld.com.pk

Need of separate Association for 2-3 Wheelers

PAMA is not true representatives of 2-3 Wheelers Assemblers as only seven assemblers of 2-3 Wheelers are their members whereas more than 60 Assemblers of 2-3 Wheelers are members of APMA.

This is a known fact that 2-3 wheelers are different category than four wheelers or heavy vehicles according to criteria given in the Trade Organization Ordinance. WTO also recognized it as separate category according to Harmonized Sector Code (H S Code) which is recognized by Pakistan in Custom Tariff through FBR. Out Transport/Traffic Codes also recognized 2-3 wheelers as separate category.

Separate Associations are also allowed by the DTO in Textiles Sector for Spinning, Weaving, Hosiery, Apparels and Garments etc.

On the other hand PAMA membership form is very tedious and cumbersome and they are demanding heavy admission fee which is Rs300,000 and Annual fee is Rs250,000 which is very high for Small and Medium Companies. PAMA is also not entertaining the new membership of 2-3 Wheelers Assemblers and using delaying tactics. This fact can be confirmed through an independent checking of their record.

PAMA instead of resolving problems of the 2-3 wheelers assemblers was creating more problems for small and medium assemblers of 2-3 wheelers as one of their member of Motorcycles Assemblers (Yusuf H. Shirazi, Atlas Group) who have dominating role in PAMA did not want that small and medium assemblers of 2-3 wheelers prosper in the country as they were providing 2-3 wheelers transport at 60% of its price with same quality.

In view of the above it was requested to the government to restrict PAMA being Association of Four wheelers or Heavy vehicles and register APMA as genuine representative of 2-3 wheelers.

Government should seriously consider that Small and Medium Assemblers have already exported 25,000 Motorcycles due to competitive price and to attract R&D Support. They have also order in hand for export of another 10,000 units but due to non availability of Research and Development Rebate as mentioned above they are unable to compete in export prices.

Hence it is imminent that government should resolve the problems being faced by APMA members on immediate basis to just enable Small and Medium Assemblers to play their role in boosting exports and earn valuable foreign exchange for the country.