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Smuggled auto parts hurt local market

Published May 05, 2012 12:10am

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PAKISTAN’S auto-parts industry is severely affected and the country is losing valuable revenue due to various malpractices by importers of auto parts and smugglers who work in collusion with unscrupulous customs and tax officials.

Under the existing customs rules, auto parts classification is one of the major issues that affect auto-part imports since duty is calculated on the basis of weight rather than value.

This creates wide disparity in the valuation of imported parts and the net result is that local auto-parts manufacturers lose their competitiveness.

The government is also losing huge volumes in sales tax as a large number of auto-part wholesellers and retailers are unregistered and do not generate sales invoices.

This encourages open sales of smuggled and illegally-mported auto parts in the market, thus creating a clear disadvantage for locally produced or genuinely imported auto parts.

In most cases, auto parts of inferior quality are also imported through government.

We must strictly enforce Customs rules and stop the smuggling of auto parts to protect the local auto-parts industry and ensure the safety of automobile users.

SYED OVAIS AKHTAR Karachi