KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed duty free import of used cars and their subsequent export after repair.
The apex trade body in its proposals for budget 2020/2021 said that the UAE had developed Export Processing Zone (EPZ) for duty free import of used cars, their repair and subsequent export to different countries especially those of Africa.
“On similar pattern a ‘Used vehicles EPZ’ be set up in Karachi, Port Qasim or Gwadar and import of both right hand and left-hand drive vehicles may be allowed under this EPZ for their export to different countries. Because of its more feasible sea route to Africa and land route to Central Asian markets, cheap labour, painters and mechanics, the proposed EPZ may turn out to more attractive than the ones in UAE.”
The FPCCI also highlighted issue of import of stock lot and job lot goods. The apex trade body said that despite the fact that stock lot and job lot goods are available in the world at lower prices, but for the protection of local industry, their import is banned.
Maintaining the ban for home consumption, permission may be granted for import of stock lot and job lot goods under Export Facilitation Schemes on 100 percent export basis.
The FPCCI also said that import of used clothing and their exports after sorting, repair, washing and packing is allowed to exporters operating in EPZ.
However, this facility is not allowed under DTRE scheme and is denied under other Export Facilitation schemes too. If the same is allowed, Pakistan can capture a bigger share because of its cheap labour.
The FPCCI said that the global warehousing market is more than $ 1.0 trillion and is growing at a very fast pace. The Export Policy Order vide para 9(g) allows export of imported goods in same state – unprocessed form from bonded warehouse and the imported goods already cleared from home consumption.
The FPCCI said that this is not in line with this global business practice. “Singapore, Malaysia, Sri-Lanka and a number of other countries allows such export, which helps in earning FE and generates employment,” it added.
The issue is that re-export of imported goods in the same state is allowed but there is no procedure which allows refund of duty and taxes paid, neither such imports are covered under DTRE or any other export facilitation scheme (manufacturing bond, temporary imports, export oriented unit etc).
No importer can import goods, ware house it and re-export after payment of import duty and taxes. He can re-export to mitigate his loss but cannot adopt it as a business to utilize cheap warehousing in Pakistan.
It proposed the Ministry of Commerce and FBR to allow import for re-exportation under DTRE Rules subject to value addition of 5percent or 10 percent.
