Tariff for auto sector is likely to reduce

According to Ministry of Industries and Production sources, a committee headed by Minister for Water and Power Khawaja Asif has revised the draft ADP 2014 making some changes in duty and tariff.

In March 2014, federal government had finalized the draft ADP 2014-19 in March 2014 without taking the views of stakeholders on board which raised hue and cry after which it was decided to take the private sector into confidence.

In the revised draft ADP 2014-19, zero duty on raw material of auto parts remained same as proposed in draft tailored in March. While duty rate on sub components and components is 5 and 10 per cent respectively against the previously proposed tariff of 12.5 per cent on both (on sub components and components) for five years.

However, in the revised draft policy, 10 per cent duty has been proposed for five years. Duty on sub assembly will remain unchanged at 20 per cent.

Presently, duty on Completely Knocked Down (CKD) is 32.5 per cent. In March 2014, the government proposed to lower it to 30 per cent but now it has been decided to fix it at 25 per cent for five years. Duty on A-Max is 50 per cent. In March 2014 draft policy, the government wanted to revise it to 35 per cent however it has been decided to fix it at 45 per cent in 2014-15, 40 per cent in 2015-16, 35 per cent in 2016-17, 2017-18 and 2018-19 respectively.