Incentives For Auto Industry: FBR Issues Details

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The Federal Board Of Revenue (FBR), Friday, Issued The Details Of The Incentives Provided To The Auto Industry Through Finance Act 2021.

The Federal Board Of Revenue (FBR), Friday, Issued The Details Of The Incentives Provided To The Auto Industry Through Finance Act 2021. According to the FBR’s budget instructions issued to the Collectors of Customs here on Friday, in order to bring down prices of small cars and to support lower-middle income group graduating from motorcycle to their first family car, following measures have been taken:

(i) The previous bifurcation of cars “upto 800cc” and “exceeding 800cc” has been replaced with “upto 850cc” and “exceeding 850cc” in respective places in tariff.

(ii) Customs Duty on import of CKD non-localized upto 850cc reduced from 30 percent to 15 percent and localized from 46 percent to 30 percent for new make or new model as certified by the EDB for two years from the date of issuance of manufacturing certificate or up to 30th June 2024, whichever is earlier.

(iii) Seven percent additional customs duty (ACD) on CKD kits and seven percent ACD and 15 percent RD on CBU cars upto 850cc exempted for two years.

(iv) Reduction of customs duty on electric vehicle in CBU to 10 percent from 25 percent for commercial importers and to five percent from 12.5 percent for the imports by the local manufacturer of EVs under SRO 656(I)/2006 for one year.

(v) Customs Duty on import of CKD non-localized for rigid trucks above five tons GVW falling under HS Code 8704 reduced from existing 10 percent to five percent.

(vi) Customs duty reduced to four percent on specific parts for hybrid electric vehicle and three percent for plug-in hybrid electric vehicle by adding new Part-V(B) of Fifth Schedule.

(vii) Customs Duty on sub-assemblies of vehicles of PCT heading 87.11 (except for motorcycle rickshaw of PCT heading 8711.3020) reduced from existing 20 percent to 12.5 percent. These measures will also remove anomaly as CKD non-localized is at 15 percent.

(viii) For 4-stroke auto rickshaw of PCT heading 8703.2115 CD on CKD localized at 30 percent for new make or new model exceeding 200cc as certified by EDB for two years from the date of issuance of manufacturing certificate or up to 30th June, 2024, whichever is earlier.

Whereas CKD non-localized attract CD at 15 percent.

(ix) For vehicles of PCT heading 87.11 (except motorcycles rickshaw of PCT heading 8711.3020) CD on CKD localized at 30 percent for new make or new model exceeding 125cc as certified by EDB for two years from the date of issuance of manufacturing certificate or up to 30th June, 2024, whichever is earlier.

Whereas CKD non-localized attract CD at 15 percent.

(x) For motorcycles rickshaw of PCT heading 8711.3020 CD on CKD localized at 30 percent for new make or new model exceeding 200cc as certified by EDB for two years from the date of issuance of manufacturing certificate or up to 30th June, 2024, whichever is earlier.

Whereas CKD non-localized attract CD at 15 percent.

(xi) All components or sub-assemblies shall not be eligible for the benefit of exemption under SRO 655(I)/2006 where IORC, as determined by EDB or IOCO, is less than 30 percent value addition for the manufacture of specified components or assemblies.

(xii) Agricultural Tractors of PCT heading 87.01 CD on localized at 15 percent for new make or new model as certified by EDB for two years from the date of issuance of manufacturing certificate or up to 30th June 2024, whichever is earlier.

(xiii) The concessionary customs duty for various models of new entrants under ADP 2016-21 to continue for five years from date of first manufacturing certificate of respective variant issued by Engineering Development Board or up to 30th June 2026, whichever is earlier.

(xiv) The importer-cum-assembler or OEM shall pay KIBOR plus three percent per annum to the customer against late delivery exceeding 60 days of initial booking on the whole of the deposited amount.

Statement/details of reimbursement @ KIBOR + 3% against deliveries beyond 60 days shall be submitted to EDB or IOCO bi-annually.

Furthermore, the importer-cum-assembler or OEM shall comply with short listed WP-29 Regulations as determined by EDB; whereas EDB or IOCO shall ensure the compliance.

(xv) The Appendix-I and Appendix-II of SRO 693(I)2006 will be updated biannually by December 31, and June 30 of every year on recommendation of Engineering Development Board. The components or assemblies localised by any OEM or vendor in respective vehicle category shall qualify for inclusion in Appendix-I and Appendix-II.

This news was originally published at B Recorder.

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