PkRevenue provides stories related to automotive industry. We focus on auto policy of Pakistan. The coverage also includes sales of domestic manufacturing.
KARACHI: The State Bank of Pakistan (SBP) on Tuesday made it mandatory for banks to take prior permission for making transactions related to import of motor cars in Completely Knocked Down (CKD).
The SBP issued a circular to implement the decision. The central bank invited attention of banks to EPD Circular Letter No. 9 dated May 20, 2022 relating to import of goods.
In this regard, the list of goods for which Authorized Dealers are required to seek prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC for initiating the import transaction, has been updated.
Henceforth, Authorized Dealers shall be required to seek prior permission from FEOD, SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure.
All other instructions on the subject shall remain unchanged. The banks have been advised to bring the same to the knowledge of all the concerned and ensure meticulous compliance of the above and other applicable regulations on the subject.
Authorized Dealers are especially instructed to bring these instructions to the knowledge of their customers and advise them to approach the bank before initiation of import transaction of any item covered under this circular letter.
It is important to note that the government on May 19, 2022 imposed ban on luxury and non-essential items in order to discourage outflow of dollars.
The import ban was imposed on only motor vehicles Completely Built Unit (CBU). However, the circular of the SBP has made the CKD motor cars import subject to prior approval.
KARACHI: The sales of locally assembled cars in Pakistan have surged by 50 per cent during 11 months (July – May) of 2021/2022 as compared with the same period of the last fiscal year, according to data released on Monday.
The car sales climbed up to 250,888 units in first 11 months of the current fiscal year as compared with 167,647 units in the corresponding months of the last fiscal year.
Analysts believed the surge in sales of locally assembled cars in 11 months to macroeconomic recovery.
Pakistan car sales (including sales of Non-PAMA members) clocked in at 27000 units, which is almost flat Month on Month (MoM) in May 2022 amid higher car prices, and Eid holidays at the start of month. The same is up by 46 per cent YoY.
Analysts at Topline Securities believe economic slowdown, increase in interest rates and further tightening of financing requirements by SBP will significantly impact car sales moving ahead.
Hyundai Nishat posted strong numbers registering an increase of 33 per cent MoM led by increase in sales of Elantra (+148 per cent MoM) and Sonata (+37 per cent MoM).
Honda Atlas Car (HCAR) recorded second highest increase of 11 per cent MoM to 2,910 units in May-2022 led by increase in sales of City & Civic by 18 per cent MoM. Similarly, Indus Motors (INDU) also posted increase of 2 per cent MoM due to increase in sales of Corrolla & Yaris by 4 per cent MoM.
Pak Suzuki (PSMC) was the only player which reported decline of 3 per cent MoM to 12,212 units in May-2022. All variant of company reported decline on MoM basis except for Wagon-R and Alto where sales were up by 24 per cent MoMand 9 per cent MoM respectively.
Amongst Tractors, Millat Tractors (MTL) recorded increase of 12 per cent MoM while Al Ghazi Tractors (AGTL) recorded decline of 8 per cent MoM.
Pakistan bike sales were down by 2 per cent MoM while remained flat on YoY in May-2022. This takes 11MFY22 bike sales to 1.7mn units, down 4 per cent YoY.
Trucks & Buses sales were up 3 per cent MoM and 23 per cent YoY in May-2022. This takes 11MFY22 sales to 5,909 units, up 50 per cent YoY led by increased transportation activity.
ISLAMABAD: Pakistan has massively increased the amount of tax on purchase of motor vehicles from July 01, 2022.
The country presented its federal budget 2022/2023 on June 10, 2022 and took various taxation measures to boost revenue collection.
Finance Minister Miftah Ismail while presenting the budget stated that in continuation of our policy to shift the burden of tax on the rich class, advance tax on motor vehicles exceeding 1600cc is proposed to be increased.
Furthermore, advance tax shall also be collected at the rate of 2 per cent of the value in cases of high value hybrid and electric vehicles. Additionally, the rate of tax for non-filers shall be enhanced to 200 per cent from the current 100 per cent.
Accordingly, the Finance Bill, 2022 proposed the following new rates of advance tax on registration of motor vehicles from July 01, 2022:
S.No
Engine Capacity
Tax
(1)
(2)
(3)
1.
Upto 850 cc
Rs.10,000
2.
851cc to 1000cc
Rs.20,000
3.
1001cc to 1300cc
Rs.25,000
4.
1301cc to 1600cc
Rs.50,000
5.
1601cc to 1800cc
Rs.150,000
6.
1801cc to 2000cc
Rs.200,000
7.
2001cc to 2500cc
Rs.300,000
8.
2501cc to 3000cc
Rs.400,000
9.
Above 3000cc
Rs.500,000
According to the Finance Bill, 2022, provided that in cases where engine capacity is not applicable and the value of vehicle is Rupees five million or more, the rate of tax collectible shall be 3% of the import value as increased by customs duty, sales tax and federal excise duty in case of imported vehicles or invoice value in case of locally manufactured or assembled vehicles.”
It further said: “Provided that the tax required to be collected under section 231B shall be increased by two hundred percent of the rate specified in First Schedule in case of persons not appearing in the active taxpayers’ list.”
ISLAMABAD: Pakistan has allowed conditional import of Completely Built Unit (CBU) motor vehicles, which have been banned through SRO 598(I)/2022.
The country on May 19, 2022 banned import of luxury and non-essential items in order to save foreign exchange and support the local currency, which depreciated massively.
Through SRO 598(I)/2022 issued May 19, 2022, the ministry of commerce imposed ban on CBU vehicles which are importable under 49 tariff lines.
However, the ministry of commerce clarified that prohibition of import would not apply on import of CBU vehicles if the imports in Pak Rupee (PKR) or imports through barter mechanism by land routes.
The ministry of commerce on May 21, 2022 issued a press release stating that in order to address the balance of payments (BOP) situation in the country resulting from the increase in current account deficit (CAD) during the first 10 month of the current FY-22, import of certain luxury and non-essential items has been prohibited, vide SRO 598(I)/2022 dated 19th May, 2022.
However, to address the concerns of certain business quarters with regard to the implementation of the said SRO, it is clarified that in terms of proviso to the paragraph-4 of the Import Policy Order, 2022, the imports where Bill of Lading (B/L) or irrevocable Letter of Credit (L/C) was issued or established prior to the notification of the SRO 598(I)/2022 dated 19.05.2022 shall be exempt from the operation of the SRO.
Hence, imported goods for which B/L or irrevocable L/C was established prior to 19th May, 2022 shall not be subject to the prohibitions contained in the said SRO.
Moreover, the business community and the general public are invited to share their concerns, proposals or any anomalies with respect to the said SRO at [email protected].
KARACHI: The Collectorate of Customs, Hyderabad has announced an auction of a huge lot of confiscated non duty paid (NDP) motor vehicles, which will be held on June 08, 2022.
The collectorate will auction the following non duty paid motor vehicles:
KARACHI: Honda Atlas Cars (Pakistan) Limited announced a sharp growth in profit by 40 per cent to Rs2.51 billion for the year ended March 31, 2022.
According to financial results submitted to Pakistan Stock Exchange (PSX) on Thursday, the annual profit after tax of the company was Rs1.79 billion in the preceding year.
The sales of the company increased to Rs108 billion for the year ended March 31, 2022 as compared with Rs67.36 billion in the preceding year. Meanwhile, cost of sales recorded at Rs102.47 billion for the year under review as compared with Rs63.58 billion in the preceding year.
The gross profit of Honda Atlas Cars (Pakistan) Limited also recorded a sharp increase to Rs5.58 billion for the year ended March 31, 2022 as compared with 3.7 billion in the preceding year.
A significant increase has been seen in administrative expenses for the year under review. The administrative expenses of the company increased to Rs1.06 billion for the year ended March 31, 2022 as compared with Rs824 million in the last year.
The company declared a final cash dividend Rs7 per share (70 per cent) was recommended for the year ended March 31, 2022 as compared with Rs4.52 per share (45.2 per cent) declared last year.
Honda Cars has not declared any bonus or right shares for the year ended March 31, 2022.
LAHORE: The Directorate of Intelligence and Investigation (I&I) customs, Lahore announced auction of motor vehicles to be held on May 26, 2022 at State Warehouse, of the directorate, Allama Iqbal Town, Lahore.
The directorate will present following vehicles for the auction:
KARACHI: The State Bank of Pakistan (SBP) on Tuesday reduced the tenure for car loan to three years from five years in order to curb demand to support balance of payment and devaluation of Pakistan Rupee (PKR).
The SBP issued Circular No. 19 of 2022 to amend prudential regulations related to consumer financing.
The central bank amended the Regulation No. 11 to reduce the maximum tenure for car financing. According to the circular, the maximum tenure of auto financing has been reduced to three years from five years for vehicles above 1000CC engine displacement and to five years from seven years for vehicles up to 1000CC engine displacement and locally assembled / manufactured electric vehicles.
However, the regulatory treatment of Roshan Apni car product communicated earler to Roshan Digital Account (RDA) participant banks will continue to remain effective.
It is pertinent to mention that the government last week imposed a complete ban on import of luxury and non-essential items. The import of cars in Completely Built Unit (CBU) has also been banned under the new policy. The import of Completely Knocked Down (CKD) cars are still allowed for imports but with certain restrictions.
The SBP on May 20, 2022 issued a circular imposing restrictions for making import payments.
The SBP said it has been decided that banks, with immediate effect, shall seek prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure, subject to following conditions:
The above requirement shall be applicable for all import transactions initiated by Authorized Dealers through (i) issuance/ amendment of letter of credit; (ii) registration/ amendment of contract; (iii) making advance payment; (iv) authorizing transactions on open account or collections basis;
The above requirement shall not be applicable on import transactions initiated by the Authorized Dealers on or before the date of issuance of this circular letter;
The banks may approach Director, FEOD, SBP-BSC, Head Office, Karachi, along with appropriate documents and its recommendation on a case to case basis;
The banks shall be required to suitably amend the importer’s bank profile in Pakistan Single Window to ensure that the aforementioned import transaction shall not be initiated on open account basis without prior permission from State Bank.
It is noteworthy that the SBP has also increased the key policy rate to 13.75 per cent in an announcement on May 23, 2022. The rise in interest rate will increase the cost of loans which will subsequently reduce the demand for car loans.
GWADAR: Collectorate of Customs (Enforcement), Gwadar has announced auction of motor cars to be held on May 23, 2022 at state warehouse godown, Gwadar.
The collectorate announced auction of following motor vehicles:
01. Zamyad Pickup Model nil, Chassis No. NAZDL104TD-0068010
02. Zamyad Pickup Model nil, Chassis No. NAZPL140BJ-0501530
03. Zamyad Pickup Model nil, Chassis No. NAZPL140TB-N272445
04. Zamyad Pickup Model nil, Chassis No. NAZPL140BJ-0503834
05. Toyota Stout Pickup Model 1983, Chassis No. RK110-601814
06. Toyota Pickup S/cabin Model 1984, Chassis No. YN55-0017594
07. Toyota Pickup S/cabin Model 1984, Chassis No. YN55-0018440
08. Toyota Hilux Surf Model 2003, Chassis No. RZN215-0008039
09. Toyota Hilux Surf Model 2007, Chassis No. GRN215-8109082
10. Toyota Hilux Surf Model 1999, Chassis No. RZN185-9030039
11. Toyota Stout Pickup S/Cabin Model 1984, Chassis No. RK110-613912
12. Toyota Corrolla Model 2005, Chassis No. NZE121-0371839
13. Toyota Hilux Surf Model 1998, Chassis No. RZN185-0031909
14. Toyota Premio Model 2008, Chassis No. NZT260-3038101
15. Toyota Axio Model 2007, Chassis No. ZRE142-6008183
16. Toyota Vitz Model 2004, Chassis No. SCP13-0030163
17. Toyota Probox Model 2003, Chassis No. ZNE10-0101673
18. Toyota Land Cruiser Pickup Model 1988, Chassis No. FJ75-0043421
19. Toyota Land Cruiser Pickup Model 1988, Chassis No. FJ75-0074709
20. Toyota Land Cruiser Pickup Model 1986, Chassis No. FJ75-0038226
21. Toyota Land Cruiser Pickup Model 1988, Chassis No. FJ75-0075357
22. Hino Truck Model 1994, Chassis No. FF3HJA-50180
23. Toyota Land Cruiser VX 4X4 Model 1998, Chassis No. UZJI00-0015026
24. Toyota Hilux D/Cabin Vigo Model 2005, Chassis No. MR0FZ29G701508652
25. Toyota Land Cruiser Pickup Model 1986, Chassis No. FJ75-0040747
KARACHI: The State Bank of Pakistan (SBP) has imposed condition for payment on import of mobile phones and motor cars.
The SBP issued a circular related import goods making it mandatory for banks to take prior permission for releasing funds for import of motor cars, mobile phones and other machinery.
In this regard the SBP informed the banks about Chapter 13 of the Foreign Exchange Manual relating to payments against import of goods.
The SBP decided that with immediate effect, the banks would require prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure, subject to following conditions:
The above requirement shall be applicable for all import transactions initiated by Authorized Dealers through (i) issuance/ amendment of letter of credit; (ii) registration/ amendment of contract; (iii) making advance payment; (iv) authorizing transactions on open account or collections basis;
The above requirement shall not be applicable on import transactions initiated by the Authorized Dealers on or before the date of issuance of this circular letter;
Authorized Dealers may approach Director, FEOD, SBP-BSC, Head Office, Karachi, along with appropriate documents and its recommendation on a case to case basis;
Authorized Dealers shall be required to suitably amend the importer’s bank profile in Pakistan Single Window to ensure that the aforementioned import transaction shall not be initiated on open account basis without prior permission from State Bank.
All other instructions on the subject shall remain unchanged. Authorized Dealers are advised to bring the same to the knowledge of all the concerned and ensure meticulous compliance of the above & other applicable regulations on the subject. Authorized Dealers are especially instructed to bring these instructions to the knowledge of their customers and advise them to approach the bank before initiation of import transaction of any item covered under this circular letter.
