Over 7,000 imported used cars are lined up at the Karachi port waiting to be picked up, while an equal number will reach in a few days, creating problems for port authorities to handle the cargo and the situation.
Importers, unwilling to pick up their cargo, say the gridlock at the port is a result of government measures taken in October to reduce car imports.
They claimed that Customs authorities do not have the finalized payment mechanism under which importers could get their cargo cleared. However, sources say that importers are willingly not picking up their cargo as they expect the government to retreat from its measures taken in October.
“We have already requested the government to resolve policy issues to settle these problems,” All Pakistan Motor Dealers Association Chairman HM Shahzad commented.
Related: Are Used Imports A Blessing?
Perturbed about the ballooning trade deficit, the government in the third week of October imposed regulatory duties on 356 essential and luxury goods. Similarly, it also changed some rules for used car imports in a bid to reduce the consumption of such goods and resultantly, reduce pressure on dollar reserves.
According to the new rules, the owners or local recipients of all new and used vehicles will pay duties and taxes supported by a bank encashment certificate, showing conversion of foreign remittances into local currency. “The government should have devised some mechanism before implementing new rules for used car imports,” said Shahzad. “Now car importers have to pay heavy demurrages at the port.”
Car importers wanted the government to delay the implementation of SRO-1067(1) 2017, a circular issued on October 20, until December 2017. However, the Ministry of Commerce is stuck with its position and has not given any space to importers.
Pakistan imports over 60,000 used cars a year worth between $300 million to $500 million. However, according to the calculations of local car industry officials, Pakistan is spending close to $750 million a year on used car imports.
Full Story: Tribune