The Lahore High Court (LHC) has directed the government to enforce the fixture of car prices after receiving a petition that challenges the sky-rocketing prices of new vehicles.
The petitioner claimed that the demand for vehicles has increased drastically over the last few months and has given local manufacturers an open window to manipulate the supply and prices. He inferred that this exploitation is largely due to the ban on imported vehicles.
The plaintiff stated that the government’s failure to maintain car prices has facilitated car companies in raising prices on a frequent basis. He demanded the government to fix the prices of cars and issue new clauses to favor vehicle imports.
Government’s Stance
As per a recent report, the government has decided to drop its plans to ban the imports of Completely Built-Up (CBU) vehicles altogether and has proposed increasing the Regulatory Duty (RD) to 50 percent on their imports. The step has been proposed to pin down the increasing import bill and current account deficit.
A senior official from the Ministry of Industries and Production stated that proposals will be submitted to the Tariff Policy Board for approval, following which the policy draft will be presented to the Prime Minister for a final review and decision.
He said,
Under the WTO regime, the country cannot ban imports. However, it can increase the tariffs on imports to reduce the import bill, so we have decided to increase the tariff on import of vehicles in the country. So much so, the increase in Federal Excise Duty (FED) up to 10 percent from the current 5 percent on vehicles being manufactured locally has also been proposed.
