LAHORE, Oct 13: In what is said to be open violation of the government policy, some companies are importing tax and duty free tractors through CKD (completely knocked down) kits instead of CBUs (completely built units), industry sources claim.

The sources told Dawn on Friday that the government had allowed tax and duty free import of completely equipped CBUs of tractors in view of gap between demand and supply as the waiting period has risen to six to eight months. However, they said, some tractor companies were misusing the facility and importing tractors from China through CKD.

They said a tractor company from Lahore had brought in 144 tractors without seats, drawers, batteries and tyres from China in April and 102 units in May. A Karachi-based company had imported 281 units without power steering, tyres, tubes and batteries from China in June.

The sources said both the importers had violated the government’s tractor import policy, which says that only fully equipped CBUs can be imported tax and duty free.

A leading auto vendor told Dawn that some people had imported cheaper tractors from China through CKD. But, he said, he did not consider it to be “illegal” because Pakistan had already phased out its deletion programme. “The import of tractors through CKDs would have amounted to violation of the government policy had the deletion programme still been in place in the country,” he said.

He said tractors were being brought in the country through CKDs in order to save freight costs. “If you import the units in the form of CBUs, the freight cost goes up sharply. The increased cost does not make any economic sense. Hence, the importers prefer to bring in machines through CKDs to avoid higher costs,” he said.

The tractor manufacturers, nevertheless, do not agree with his view, and say the government must direct the Central Board of Revenue (CBR) to enforce the tractor import policy.