Discussion on used cars import delayed

KARACHI: Economic Coordination Committee (ECC) of the Cabinet on Tuesday deferred discussion over the used cars import policy and decided to take up this proposal in the next ECC meeting.Sources in the industry had already indicated that ECC might defer its decision of age-relaxed policy for next meeting in order to evaluate the repercussions of used cars imports on the economy.According to the sources, the ECC had recommended increase in age-limit of imported cars in December 2010 after which a SRO was issued to allow 5 years old cars to be imported under personal baggage and transfer of residence and gift schemes.However, the Prime Minister, as per sources, instructed the Ministry of Commerce to reverse the age limit to 3 years reportedly after he was briefed by FBR and Finance Ministry regarding the possible depletion of foreign exchange and revenue shortfall, sources said. Sources said that the Federal Board of Revenue (FBR) has expressed its reservations over the repercussions on industry and economy in their briefings to ECC.. Earlier, the government was considering extension in the period of used car up to five-year limit again on the condition of enhanced taxes and duties to rescue the billion of rupees investment of dealers stuck up recently, following the revision of imports policy.The decision was supposed to be taken up in the Economic Coordination Committee (ECC), held on Tuesday. The objective of this proposal was to address the concerns of traders and automotive makers equally, which has caused a rift between both parties for past many months.The government was also considering imports of such old passenger cars with revised custom duty and regulatory duties without any change in depreciation allowance.The car importers have been pressing the government for relaxing age-limit of used car by five years. The ECC in its earlier recommendation did not take into account the foreign exchange and revenue loss to the national exchequer due to import of used cars. Sources said that the Prime Minister had taken the decision to withdraw the age relaxation as the importers were reported to have used hundi transaction for foreign exchange transfer besides abusing the personal baggage and gift scheme meant for overseas Pakistanis – Nation