Used cars age limit: MoC withdraws SRO of December 8
MUSHTAQ GHUMMAN ISLAMABAD (December 31, 2010) : The Commerce Ministry on Thursday withdrew its Statutory Regulatory Order (SRO) of December 8, 2010, regarding increase in age limit from three to five years for used cars imported under personal baggage, gift and transfer of residence schemes, well-informed sources told Business Recorder.
This decision has being taken on the instructions of Finance Minister Dr Abdul Hafeez Sheikh, subsequent to Prime Minister Syed Yousuf Raza Gilani's expression of annoyance at him for increasing the age limit of used cars from three to five years at the forum of Economic Co-ordination Committee (ECC) of the Cabinet.
Analysts view this backtrack as a result of 'significant influence' on the Prime Minister who was reportedly approached by local auto manufacturers. Official documents reveal that Prime Minister Gilani, while chairing a meeting of the ECC some time back, directed the concerned ministries to allow import of used cars if local assemblers do not reduce price of their units.
Local assemblers disturbed over this decision conveyed to the government the fact that Japan's investment in Pakistan including existing auto assemblers such as Toyota Indus, Suzuki and Honda could be rolled back as a result - companies which enhanced their production to meet domestic demand. Sources revealed that the Commerce Ministry's concerned officials, including Additional Secretary Shahid Rahim Sheikh, waited Wednesday night for the return of the new order from Secretary Law and Justice who was first busy in the Senate at the time of voting on 19th Amendment but later reportedly left the office without vetting the SRO.
The Prime Minister had written a letter to the Finance Minister and expressed anger at his decision to enhance the age limit of imported used cars by two years, the sources added. The Commerce Ministry, sources said, was one of the ministries that received the Prime Minister's 'angry' letter.
Official documents obtained from the MoI&P, on December 7, 2010, reveal that the ECC had directed the Commerce Ministry to notify increase in the age limit of used cars from three to five years. The MoC was also directed to modify earlier decision to include all vehicles and three-wheelers.
On December 8, 2010, the Commerce Ministry issued a Statutory Regulatory Order (SRO) after a hurriedly called inter ministerial meeting presided over by the Additional Secretary, Shahid Rahim Sheikh. This was subsequent to Finance Minister Dr Abdul Hafeez Sheikh, Chairman Economic Co-ordination Committee (ECC) of the Cabinet, snubbing the Commerce Ministry on December 7, 2010 for not implementing the decision of the supreme body, which is responsible for economic related decisions. Unconfirmed reports also suggest that one federal minister was amongst those who pressurised the Commerce Ministry for issuance of SRO immediately.
On December 8, 2010 the Commerce Ministry issued SRO 11131(1)/2010 which states "in exercise of powers conferred by sub-section (1) of the section 3 of the imports and Exports (Control) Act, 1950(XXXIX of 1950), the federal government is pleased to direct that the following further amendment shall be made in the Import Policy Order, 2009 namely:- in the aforesaid Order, in appendix-E, in paragraph 3, in the first proviso for the full stop at the end at the end of the colon shall be substituted and thereafter the following proviso shall be inserted, namely: Provided further that cars not older than five years shall be importable under the personal baggage, gift and transfer of residence schemes. This provision shall be applicable from December 8, 2010."
The Prime Minister, sources said, wanted the immediate withdrawal of the offending SRO but the Commerce Ministry was of the view that according to Rules of Business it was not possible until the ECC takes back its earlier decision. However, the ministry initiated the process of withdrawal of SRO after the Finance Minister, as Chairman ECC directed that SRO may be rescinded with immediate effect.