Federal government’s departments including the Federal Board of Revenue (FBR) need to change their attitude otherwise the situation pertaining to routine matters will remain the same.
After June 2006, the industry continues to operate under tremendous pressure coupled with step motherly treatment of federal government departments and ministries. Till today, bureaucratic hurdles and officials’ lethargic attitude still exist.
In the last 10 years, same people in the bureaucracy have been sitting on their seats who have seen three different governments in their tenure.
Like past the Federal Board of Revenue has recently issued sales tax audit notices to every motorcycle assemblers and their vendors. “Are these part of the policies which have been adopted in the last 10 years or there is some kind of pressure from the EDB,” chairman Association of Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Shaikh said. The language of the notices clear reflects the secret hand of the EDB in formulating the notices, he added.
The turnover of three to four big auto sector assemblers of cars and motorcycles is bigger than 500 small assemblers and vendors. But the government, like past practice, has always created problems for small units leaving big assemblers to operate freely.
According to sales tax notices, the FBR demands sales tax records under section 37 and 38 (2) of the sales tax act 1990 for the period 1.07.2011 to 30.6.2013.
The FBR informed the field commissioners to examine the assemblers and vendors of motorcycles in their areas that are they following SRO 656/2006 dated 22.6.2006 and check have they procured the parts and components from the importers and traders instead of original manufacturers.
It is also notable that the genuine manufacturers supplying parts to the OEMs are making parts by themselves or importing these parts from China as the cost of production of auto parts in China is much lower than Pakistan.
Assemblers have been asked to submit following documents for sales tax audit.
1)Purchase register and sales register.
2)Purchase invoices and bill of entries of imports.
3)Monthly sales tax returns and cash payment receipts to NBP.
4)Compliance of SRO 656/2006. These documents are provided to the EDB.
Chairman APMA Mohammad Sabir Shaikh said that for the last one decade the small assemblers have been facing these kind of problems.
He urged the Prime Minister Nawaz Sharif, Finance Minister Ishaq Dar and FBR chairman to stop these kinds of bottlenecks as the industry has already been surviving under stiff business and political environment.
The government should refrain from creating hardships and support the industry in order to pull out the assemblers from hot water, he said.
He urged the government to appoint CEO of the EDB immediately and try to fill this post by taking a competent person from the private sector or the industry.
Sabir said that the industry and the vendors were highly hopeful after taking over of PML-N government in 2013 but so far the political crisis appears to have deepened which has put on hold the future investment plans by the local industry.
He said there is a need to end the monopoly of big assemblers and vendors who enjoy upper hand in all the policy making in every government. As a result, the voice of small units remains unheard.
The political heat engulfing Islamabad mainly and other parts of the country since August 14 because of sit in by Pakistan Tehreek-e-Insaf and Pakistan Awami Tehreek is one of the main problems of people who are looking forward for change in government that can bring good industrial and government policies besides resolution of their genuine problems.