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ECC likely to slash customs duty in new Auto Policy 2014

ECC likely to slash customs duty in new Auto Policy 2014

ISLAMABAD: Economic Co-ordination Committee (ECC) of the Cabinet is likely to slash the tariff for auto sector after review of the draft of Auto Development Policy (ADP) 2014.

According to a report, a committee led by Minister for Water and Power Khawaja Asif has reviewed the draft of Auto Development Policy 2014 recommending some changes in duty and tariff.

In March 2014, federal government had finalized the draft of ADP 2014-19 in March 2014 without taking on board all the stakeholders.

In the revised draft, zero customs duty on raw material of auto parts is maintained while customs duty on sub-components and components is proposed as 5 and 10 per cent respectively against earlier recommended duty of 12.5 per cent.

However, 10 per cent duty is recommended in revised draft policy while duty on sub assembly will remain unchanged at 20 per cent.

Presently, duty on Completely Knocked Down (CKD) is 32.5 per cent. In March 2014, the government proposed to lower it to 30 per cent but now it has been decided to fix it at 25 per cent for five years. Duty on A-Max is 50 per cent. In March 2014 draft policy, the government wanted to revise it to 35 per cent however it is decided to fix it at 45 per cent in 2014-15, 40 per cent in 2015-16, 35 per cent in 2016-17, 2017-18 and 2018-19 respectively.