The auto industry has demanded the abolishment of Additional Customs Duty (ACD) on the import of spare parts in Pakistan in the upcoming budget. Currently, the industry is paying 7% ACD on this import. Furthermore, it has also demanded the same incentives for hybrid vehicle policy to the auto sector, which the government has announced in the Electric Vehicle (EV) policy.
Talking to the media, Indus Motors Company (IMC) CEO Ali Asghar Jamali said that the government should also announce the incentives for local vendors to encourage local manufacturing. He also demanded a long-term auto policy.
Issue of ‘ON Money’
Jamali asked the government to adopt a wholesale-retail mechanism for vehicles sales. He said that this mechanism is followed globally, and it helps end the issues like ‘ON Money’ and delays in the delivery of vehicles. The CEO praised the government’s steps for ending the premium by imposing Withholding tax. However, he urged the ruling party to further improve the sales mechanism to end the ‘ON Money’ issue.
Car Dealers:
He further said that the current mechanism for new car sales has become unviable for the dealers. Under the system, the dealers have to pay Rs294,945 in government levies on the sale of Rs4million car. Meanwhile, their net commission is only Rs56,760. Explaining further, Jamali said that the dealers work as commission agent under the current system.
Under this system, a customer places the order through a dealer and pay the booking advance. Then the dealers send the order and payment to the manufacturing company. The company generates an invoice in the customer’s name and dispatches the car to the dealer for the customer.
As per Jamali, instead of considering the dealer a commission agent, he should be treated as a retailer.
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