KARACHI, June 23: Bus and truck makers are worried over a phenomenal drop in fresh bookings of vehicles as majority of their buyers belong to tribal and FATA areas and are unable to book vehicles owing to non-availability of national tax numbers (NTN).
A leading heavy vehicle assembler said that his company could only sell two to four vehicles after the budget as compared to average 80 units a month since the government had directed the local assemblers to sell vehicles to NTN card holders only.
Another commercial vehicle assembler says that customers have stopped booking vehicles because majority of the buyers do not have NTN. He said the current scenario for assemblers, who had come out of red after two years, was very alarming owing to slowdown in fresh booking orders.
Sources said that leading commercial vehicle assemblers like Hinopak, Ghandhara Nissan Diesel, Dong Feng, etc., on Monday jointly requested Finance Minister Shaukat Aziz to revert the decision. The assemblers in a request draft point out that bulk of the country's commercial vehicles is lifted by the tribal area people who do not hold the NTN card.
The government is working on to broaden the tax base by bringing the tribal people under the tax net who buy costly buses and trucks on collective basis but avoid paying taxes to the government.
Besides drop in booking of new vehicles, the assemblers are also worried over a drop in fresh bus orders from transport operators in various city routes due to withdrawal of duty exemption on CKD kits meant for assembling buses under the Urban Transport Scheme (UTS).
An assembler said that from now on a 20 per cent import duty will be charged on CKD kits to be imported for manufacturing buses for UTS, which was previously at zero rate of duty.
He said that the increase in duty on CKD kits might result in price hike of buses by Rs200,000-225,000 per unit and that was why the operators were reluctant in placing new orders.
Pakistan Automotive Manufacturers Association (PAMA) chairman Kunwar Idris says that a steep drop in fresh bookings is visible as the tribal area people who do not pay taxes are not turning up to book new vehicles.
On car segment, he said that NTN condition had now combined with another issue of import duty on new cars, thus causing considerable fall in booking of cars. The PAMA, he said, had sought a meeting with the finance minister to discuss NTN and import duty cut issues but so far the ministry had not given any green signal for the meeting.
Mr Idris said the NTN condition would seriously affect the government's revenue collection because of decline in booking of new cars. He said that there was a tremendous growth in the manufacturing sector and vehicle productions had been doubled, but unfortunately the NTN condition would give a severe jerk to the manufacturing index and dampen the business of assemblers.
He recalled that the finance minister three months back in a meeting with the assemblers was quite convinced that the NTN condition would not be imposed. Meanwhile, market sources said that many executives in car and commercial vehicle companies were trying to hold meetings with the finance minister on individual basis so that the issue of NTN could be resolved immediately.
Pak Suzuki Motor Company has issued a letter to its authorized dealers on June 22 that reads: "It is informed with immediate effect that invoicing of Cultus VX and VXR will be arranged only on providing of NTN certificate."
The letter further says: "To enable us to comply with the above requirement and raise invoices of the above mentioned cars - you are requested to approach the customers of Cultus to provide the NTN immediately so that their vehicles could be delivered."
Car makers usually book new cars on 100 per cent down-payment. A Suzuki company executive said payment from fresh booking orders had declined by over 70 per cent after the budget with the marked decline in new bookings.
"The company is still taking provisional booking from the customers but cars will only be delivered to them on producing NTN certificate." Another leading car maker said that bookings of new cars had declined by 90 per cent due to the NTN condition.