Motorcycle industry: customs tariff changes made under agreed TBS regime
SOHAIL SARFRAZ
ISLAMABAD (June 16 2009): The Federal Board of Revenue (FBR) has made customs tariff changes under agreed framework of Tariff Based System (TBS) regime for motorcycle industry in budget (2009-2010). According to the "customs budget instructions" issued here on Monday to the field formations, certain tariff changes have been made as per agreed framework of Tariff Based System (TBS) regime.
Through these changes, customs duty on motorcycles is being reduced from 70 percent to 65 percent in the customs tariff. The customs duty on non-localised components of motorcycles is being reduced from 20 percent to 15 percent in SRO.656 for local assemblers/manufacturers (ie OEMs). Additional duty of 32.5 percent is being levied through SRO 693/2006 on four localised parts of motorcycles, ie, piston, sprocket cam, cock for fuel tank and clutch assembly to protect local vendor industry.
Due to this change, the effective rate of duty on these parts would be 47.5 percent. The customs duty on five components used in the manufacture of 'Trailers' ie axle complete, mechanical suspension, ASR brake system, pintle hook and wheel rim is being reduced from 15 percent to 5 percent in SRO to promote local manufacturing of Trailers.
Tyres and tubes have been included in the TBS scheme at existing statutory rates. The purpose of this measure is to ensure that .OEMS either import tyres and tubes directly or procure from sales tax registered local vendors, as given in condition (iv)a of SRO 656(1)/2006, instructions added.