Tyres import causing loss of Rs5 billion to exchequer

tyres

The import of under-invoiced tyres continues unabated, rendering a massive loss of five billion rupees every year to national kitty, an industry source told The News on Thursday.

Khurram Suriya, proprietor of Suriya Motors, said the import of tyres under the ‘other’ category is growing day by day and the concerned authorities like Federal Board of Revenue (FBR) and customs are indifferent to this practice, which is causing huge losses to the national economy and local tyre industry.

For example, he added, the number of tyres imported under the head of ‘other category’ for passenger cars climbed to 816,000 in 2012-13 from ‘nil’ in 2008-09.

‘The idea of designating tyres as others is probably to cheat the government of levy-able duty/taxes by wrongly declaring the size of tyres and hence getting away with the wrong import trade price (ITP), which is far from reality,’ he said.

Notably, tyres for passenger car, light truck/van, heavy truck/bus, tractor and off-road vehicle are normally imported into the country.

Suriya termed the category of others as absurd, especially in the presence of specific categories.

He believed if the FBR pushes up the ITP, on which duty and taxes on imported tyres are calculated, it could easily cover the revenue shortfall of five billion rupees per annum.

Smuggling of used as well as new tyres is on the rise. They are used as fuel to the cement industry, which is not environment-friendly and against the environment law.

The statistics of 2012-13 showed that the demand of tyres for all categories was recorded at eight million. The local production stood at 1.70 million, which could meet only 20 percent of the demand. Four million tyres were imported in the country for the last fiscal year – again only 48 percent of the total demand.

The proprietor of Suriya Motors said that over 2.3 million tyres worth Rs25 billion were smuggled into the country in FY13.

The tyre supplier is of the view that the government should set up custom check posts on different roads leading into the main cities.

He advised the revenue authority to conduct raids on different shops in Rawalpindi/Islamabad initially to get to know the documentation of tyres in stock. In case of non-availability of documents, the tyres should be confiscated, he added.

‘Couple of raids every month in different cities will force smugglers to cease their businesses. This will encourage the local tyre industry as well as help the government increase revenue from taxes,’ reasoned Suriya.

Source: The News International
Published: 21 Mar 2014