KARACHI, April 21: The auto vendor industry has so far invested Rs5-6 billion during the current fiscal year, besides opening 25 per cent new job avenues. The total investment till the fiscal year 2003-04 stood at Rs70 billion, while over 160,000 persons were involved in the industry.

“So far everything is going smoothly in the auto vendor industry and more investments and jobs will be created in the coming years as long as the assembling industries flourish and the government continues with its current policies,” Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) Chairman Mehdi Ali Rizvi told Dawn on Thursday.

Paapam members are concerned about the liberal imports of used cars, otherwise they do not feel threatened over the import of cars in completely built up (CBU) conditions, he says.

“The ban on import of reconditioned vehicles must continue for all categories. Commercial importers are misusing the window for overseas Pakistanis that are directly hitting the volumes of local industry. This must be discontinued,” he added.

Second-hand vehicles are currently imported through transfer of residence and gift scheme. Besides, customs duty on such vehicles should also be enhanced, he said.

“Paapam’s concerns should be addressed by the cabinet before taking any decision, including issues like opening of import of reconditioned cars, reduction in CBU duties, etc,” Mr Mehdi said.

The association has over 250 members, but total vendors in the country are estimated at 850. It provides over Rs8 billion to the national kitty.

“No new vendors have emerged in the country. The existing members have made huge expansion in their businesses since demand and production in the entire auto sector have escalated,” the Paapam chief claimed, adding that vendors had multiplied their production capacities three times in the last two to three years.

Meanwhile, Paapam has suggested various proposals for the upcoming budget and trade policy. It has urged the government to maintain 35 per cent customs duty on imports all commercial auto parts across the board.

The association pointed out that massive under-invoicing on imports was providing undue advantage to the importers

and retarding direct local business for the auto parts manufacturers.

“Besides, auto parts should not be included in the Afghan Transit Trade.” (Auto parts are currently in the negative list).

On rising steel and plastic items prices, Paapam has suggested that all inputs to Pakistan Steel should be allowed to be imported at zero rate of duty. “Rerollable scrap and pig iron should be allowed at zero rate of duty. All steel whether in coils, flats or round should be importable at five per cent if not made in Pakistan; if made in Pakistan it should be allowed at 10 per cent of customs duty,” the association demanded.

It suggested that all plastic inputs for the engineering industry should be importable at zero rates. Paapam has called for a cut in sales tax rate to 12.5 per cent from 15 per cent, besides strict implementation and imposition of GST at auto parts retail stage. “All items on which sales tax is paid by the industry should be adjustable by input tax. This will enhance the value-added tax culture,” it added.