Overview
Recently the government has released the used car import from the restriction of SRO 1571(I)/2022 imposed on August 2022. Under the SRO used car import is allowed with 100% RD. Due to the International Import Requirement, the government was not able to completely ban the import, so they make it difficult for citizens to import a car. This scheme was designed to control the trade of dollars which caused inflation in the country.
It is pertinent to mention that government has a plan for the 100% RD on used car import for February 2023 but they pushed it to March 31, 2023. In our previous blog, we mentioned that the Federal Board of Revenue has not further extended the SRO and reversed the regulatory duty which was implemented before August 2022.
Matter of RD Removal
Regulatory Duty is not removed it’s just reversed as working before August 2022. The RD will be charged as per the previous SRO.
As per the previous rules, there was no RD on cars up to 1800cc but above 1800cc cars will pay 70% RD and it is now working in the same terms. However, the import of new cars also receives favor as RD is very less on new cars import.
There are several news rumors that RD is completely abolished, and car prices will significantly reduce. It is not true. The RD is revised as per the previous terms working before August 2022.
Conclusion
Restrictions on used car imports disturb the overall economic structure. A number of import car businesses closed and faced losses. Meanwhile, the local automotive industry also disturbs import restrictions and still SBP does not approve LCs for CKD kits import. But the car makers will get benefit from the import of CBU units. The local automotive industry also required the support of the government to run businesses smoothly terms.
