KARACHI, Sept 22: Smuggled liquid crystal display (LCD) and plasma display panel (PDP) television sets have taken over 80 per cent market because of an average 25 per cent difference in prices as compared with locally assembled sets.

Local assemblers say that the quantum of illegal and smuggled arrival of LCD and plasma televisions through khepias and their sales from duty-free shops to fake customers without payment of duty and taxes has increased manifold in the last six months, creating problems for survival of local industry.

These goods are freely sold in the markets without any invoice, warranty etc.

The LCD and plasma TV sets are illegally imported without any declaration, and the importer, clearing agent, the officials and the retailers have colluded at various levels to deceive the government in paying any taxes and duties.

Assemblers claim that these kinds of TV sets are slowly replacing conventional TV sets and their demand has increased rapidly.

They believe these sets will replace conventional TV sets in the next five years completely.

“Our 32 inch LCD TV is priced at Rs70,000, including taxes and duty paid to the government, while a smuggled brand of same name is available at Rs50,000 in the market,” said chairman Pakistan Electronics Manufacturers Association (PEMA), Sarfarazuddin, adding price difference between smuggled and locally assembled increases with size.

Because of big price difference, customers prefer buying illegal items at reduced rates.

As a result, local assembly has been suffering because of continuous drop in sales for the last few months, he said.

He said he has sent separate letters to the Director General Intellegence and Investigation and Federal Board of Revenue (FBR) by informing them that plasma and LCD TV are arriving from Dubai and are sold through agents of duty free shops to the dealers in the electronics markets.

The local industry imports SKD kits of plasma and LCD TVs by paying 10 per cent customs duty, 15 per cent sales tax, 1.5 per cent income tax and one per cent special excise duty. Therefore, total import duties and local taxes make a cumulative impact of 35 per cent.

He asked the DG Intelligence to investigate the sale of goods from the duty free shops to genuine customers so that the illegal sale to fake customers is controlled.

Meanwhile, Chairman and CEO of Digital World Pakistan (DWP Group), maker of Samsung LCD and Plasma TV, Mohammad Farooq Naseem has informed the FBR that quantum of import of semi knocked down kits (SKD) directly from Samsung for the assembly of sets locally has declined since June 2007 due to increase in illegal smuggled goods in the markets.

In June, DWP imported 200 kits while it declined to 150 each in July 2007 and August 2007.

He said large number of smuggled Samsung’s LCD and Plasma TVs are available in the market which have found way through Dubai, Singapore etc.

Farooq said that the official import data of the Customs does not show these LCD and Plasma TV sets at all as they have not been officially imported nor has any bill of entry of their import been filed at any of the collectorates.

He urged the FBR to abolish customs duty on SKD kits of the these TV sets to allow the industry to compete with smuggling and illegal imports.