To cut the prices of locally manufactured cars, federal ministry of finance, economic affairs, statistics and revenue finally give go ahead to new entrants to import complete knock down (CKD) kits at customs duty rate of 32.5 per cent and 20 per cent in case of cars and Light Commercial Vehicles (LCVs), respectively. Ministry of finance has issued notification (SRO 1098(1)/2011) on Friday, which amends SRO 693(1)/2006, dated 1st July, 2006. The notification states, “…the additional customs-duty leviable under this notification shall not be charged on sub-components and components, imported in any kit form by an assembler or manufacturer declared to be a new entrant by Engineering Development Board (EDB), for the vehicles specified in the said table for a period of three years from the start of assembly or manufacturing of respective vehicles, subject to following conditions, namely:
(i) The new entrant assembler or manufacturers shall chalk out a plan for progressive manufacturing of the vehicles spreading over a maximum period of three years within which, he shall catch up with the localisation or indigenisation level of respective vehicles, as approved by Auto Industry Development Committee (AIDC) of EDB;
(ii) The continued non-levy of said additional customs-duty shall be contingent upon the achievement of indigenisation as determined by AIDC of the progressive annual EDB. In case of any material deviation by the new entrant, AIDC shall determine the stoppage or withdrawal of the incentive of non-levy of said additional customs-duty, allowed as such, retrospectively;
(iii) The new entrant shall abide by all the terms and conditions laid down in the separate notifications issued by the ministry of industries and FBR for assembly or manufacturing of the said vehicles under Auto Industry Development Programme (AIDP) and Tariff Based System (TBS); (iv) The additional customs duty shall be levied on the sub-components and components which become indigenised by the new entrant assembler or manufacturers, in accordance with the said plan for progressive manufacturing.”