KARACHI: Pakistan Automotive Parts and Accessories Manufacturers (Paapam) has claimed that the auto parts makers do not enjoy 98 per cent tariff protection.

Giving a taxation breakup, the association said the duty on completely knocked down (CKD) car kits is 30pc with an additional 16pc customs duty applied to locally developed parts.

Rather than functioning as excessive protection, this is intended to serve as a deterrent for the assemblers not to import already localised parts but to source them domestically. CKD duty on motorcycles is just 15pc and significantly lower 1pc on tractors 1pc.

Paapam said GST is a fully adjustable tax in the value chain. It neither serves as a protection for part makers nor does it impact the competitiveness of local manufacturing.

It said that in many cases, raw materials used for parts manufacturing face substantial additional custom duty and regulatory duties which are at times higher than the finished parts, thus leading to a negative cascading effect on local production costs.

Published in Dawn, May 16th, 2025