ISLAMABAD, June 5: The government is considering a proposal to reduce the rates of customs duty on import of motor vehicles from the next financial year.

Well-placed sources told Dawn on Saturday that the tax authorities will also discuss the proposed reduction in rates with the ministry of industry and production and relevant stakeholders.

The tax authorities have proposed to scale down the import duty on motor vehicles up to 1,000 CC to 60 per cent from the current 100 per cent. They also proposed to reduce the import duty on vehicles up to 1,500 CC to 75 per cent from 120 per cent and on 1,800 CC vehicles to 125 per cent from the current 150 per cent.

And it was also proposed to reduce the custom duty from 250 per cent to 150 per cent on motor vehicles above 1,800 CC, added the sources.

According to the sources, the Central Board of Revenue (CBR) and ministry of industries and production were strongly support the proposal to reduce the import duty on motor vehicles from the next fiscal year.

However, the sources said that the deputy chairman Planning Commission was opposing the proposal what he believed the reduction in duty would hurt local production of vehicles.

The CBR has already made an attempt in the budget of 2002-03 by reducing the customs duty up to 75 per cent on motor vehicles up to 1,000 CC; 100 per cent on up to 1500 CC, 125 pre cent on up to 1,800 CC and 200 per cent on motor vehicles above 1,800 CC.

According to the sources, due to the massive pressure of the local auto manufacturers, government had withdrawn the duty reduction decision immediately.

The sources said that in the next two to three days final decision to this effect was likely to be taken. The decision if taken would be announced in the upcoming budget.

The government had already constituted a committee to review the prices and other issues regarding the auto industry, the source said and added but the committee failed to come up with any report till date.