The Nation: 02-October-2011

LAHORE – Syed Nabil Hashmi Saturday was elected unopposed Central Chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) while Munir K. Bana as Vice Chairman.

Agha Qasim Raza, Mohammad Ashraf, Tofiq Umer Sherwani, Mirza Shafqat Mehmood, Mohammad Aslam Malik, Sheikh Mehboob Ashraf, Mohammad Waseem Khalid, Arshad Amin Awan, Mashood Ali Khan, Mohammad Ashraf Sheikh, Mohammad Aslam Sherani, Mohammad Siddiq Misri, Shariq Sohail and Mushtaq A. Aftab have been elected as Executive Committee members.

Soon after his election, the Central Chairman Syed Nabil Hashmi said that auto sector was passing through a critical time of history. Manufacturing units are being closed while industrial workers are facing unemployment. He said that five lakh workers of 300 auto parts manufacturing units are facing the threat of unemployment due to closure of tractor manufacturing units.

He said that imposition of 16 per cent General Sales Tax and decision to allow import will not only ruin tractor industry but it would also have fatal repercussions on the Agri economy and engineering industry.

He said that the imposition of 16 per cent General Sales Tax on tractors has resulted in the closure of tractor plants and 300 tractor parts manufacturers for the last 2 months.

No industry in Pakistan has remained closed for such a long period but the irony of the situation is that it has been created by the Government itself and neither any remedy is in sight nor government showing any signs of concern.

He said that approximately 80,000 tractors were produced in the country last year averaging 6000-7000 tractors per month but after the imposition of sales tax this sale has nose dived to 500 tractors a month.

So the FBR’s claim of generating revenue by imposing GST on tractors has had quite opposite effect. The government on the pretext of bringing agri income under tax net and increase the Tax to GDP ratio imposed 16 percent GST on tractors. He said that in India GST on tractors is 4-5 percent. Europe levies a tax of 8 percent and in other countries around the world, the rate of tax on agri inputs is generally lower or these inputs are subsidized. It is unfortunate that the government has suddenly imposed 16 percent GST on tractors.