Islamabad June 09 2021: Prime Minster of Pakistan, Imran Khan, is going to approve new Auto Policy today.
The focus of the policy is to reduce car prices for the middle class to increase its affordability for them, enhance local production and tap export market of Pakistan.
A L S O | R E A D
JS Global Analyst Expects Automobile Sales To Decline In May 2021
Car sales increased substantially by 54 percent to 151,625 during the period from July 2020 to April 2021.
Earlier, the previous government has introduced AUTOMOTIVE DEVELOPMENT POLICY (2016-2021) to spur investment in Auto Sector. Investment Categories ADP (2016-21) envisages two categories of New Investment with different incentives:
Category-A
Greenfield Investment is defined as the installation of new and independent automotive assembly and manufacturing facilities by an investor for the production of vehicles of a make not already being assembled / manufactured in Pakistan. Investor shall be entitled to the following incentives:
• Duty-free import of plant and machinery for setting up the assembly and/or manufacturing facility on a one-time basis
• Import of 100 vehicle of the same variant in CBU form at 50 percent of the prevailing duty for test marketing after ground breaking of the project
• Concessional rate of custom duty @ 10 percent on non- localised parts and @ 25 percent on localised parts for a period of five years for the manufacturing of Cars and LCVs
• Import of all parts (both localised and non-localised) at prevailing customs duty applicable to non-localised parts for manufacturing of trucks, buses and prime-movers for a period of three years
Category-B
Brownfield Investment is defined as revival of an existing assembly and/or manufacturing facilities, that is non-operational or closed on or before July 01, 2013 and the make is not in production in Pakistan since that date and that the revival is undertaken either independently by original owners or new investors or under joint venture agreement with foreign principal or by foreign principal independently through purchase of plant. b. Investment Incentives. Investor shall be entitled to the following incentives:
• Import of non-localised parts at 10 percent rate of customs duty and localised parts at 25 percent duty for a period of three years for the manufacturing of Cars and LCVs
• Import of all parts (both localised and non-localised) at prevailing customs duty applicable to non-localised parts for manufacturing of trucks, buses and prime-movers for a period of three years
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