KARACHI - Pakistan Automotive Manufacturers Association has raised concerns over the concessions given by customs to importers of motorcycle parts over the manufacturing industry without any basis or justification.

In a letter to DG Customs Valuation, PAMA Director General Abdul Waheed Khan said that the recent valuation ruling No 685/2014 dated Sept 15, 2014 was enforced without taking Original Equipment Manufacturers (OEMs) on board. The new ITP regarding motorcycle parts of China origin by the customs authorities has seriously endangered revenues to the government, OEMs’ investment, employment base, and foreign exchange to the country. The customs authorities reevaluated the Import Trade Prices (ITPs) of motorcycle parts recently that gave commercial importers huge concessions of up to 400% against the values determined for OEMs, said a source in the industry. ‘These unrealistic low values of motorcycle parts for commercial imports have resulted in a situation highly dangerous to the local parts manufacturing sector as motorcycle assemblers are using these low-valued parts for assembly,’ added a local auto part manufacturer.

The manufacturer said that there was no need of this revaluation because the official prices of Aluminum Alloy set by London Metal Exchange have increased, so it is beyond comprehension why the customs decreased the ITPs to such a level whereas they should have increased the ITPs instead. It is worth mentioning here that there are more than 60 active motorcycle manufacturers in the country who are directly affected by this decision.

The manufacturer added the customs authorities should know that the price difference for both branded and non-branded parts may not be more than 25% to 30% as the same material, same machine, and same process are being used in manufacturing of the part.

 The letter said that positive efforts in this regard will not only increase Government revenue but will also help encourage investment, increase employment and will save valuable foreign exchange.