IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 21 Oct 2013 | Removal date: open ended
Still in force

Tax or social insurance relief

On 21 October 2013, Pakistan's Ministry of Finance and Revenue issued notifications SRO 939(I)/2013 and SRO 940(I)/2013, which reduce the custom duties leviable on the imports of sub-components and components, imported in any kit form by a new entrant assembler or manufacturer, for assembly or manufacturing of motorcycles classified under HS 8711.
 
The earlier policy for new entrant in manufacturing and assembling was setup in 2006, and the current amendments are as follows - 
 
1) Lower customs duty at the rate of 10%, instead of 15%, is availble for new entrants for five years. This will be phased out each year as manufacturing of components are localised
2) Additional customs duty leviable at the rate of 32.5% shall not be charged for a period of five years. The benefit is also available only when the required conditons for localization are satisfied each year
 
This measure is likely to have mixed effects on foreign commercial interests. New foreign investors will benefit but existing foreign manufacturers and assemblers in Pakistan will face additional competition. The linking of the tariff reduction to local production targets adds another distortion. Foreign exporters of finished motorcycles are likely to be harmed as well. Hence it is reported here as an Amber measure.
 The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries. 
 
 

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

499 Other transport equipment & parts
8711 Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without sidecars; sidecars.
871120 With reciprocating internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250 cc

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