On Friday, an auto parts manufacturer, Baluchistan Wheels Limited, informed the Pakistan Stock Exchange (PSX) that it is temporarily closing its plant.
The official notice cited reduced demand and production volumes from its major customers. The company’s operations will remain suspended from June 19 until the end of the Eid holidays.
The official notification reads:
Despite repeated cries for help, the 2023-24 fiscal budget hasn’t done the auto parts industry any favors apart from the Automotive Industry Development and Export Plan (AIDEP) 2021-26.
As per the official budget document, the government has set a 35% Customs Duty (CD) rate on the import of car components. The same rate has been applied to all car parts regardless of how basic or complex they are.
The list of parts includes:
The taxes on such basic components are likely to act as deterrents in car price control or reduction. For the parts importers, the high CD rates are likely to be a grave challenge.
