Ghandhara Tyre CEO Hussain Kuli Khan said that tire smuggling has crippled the industry with a sharp increase in the last 6 months alone. According to reports, the smuggled tires are of inferior quality and are openly available at all main city centers. Despite the lower quality, they are attracting customers due to lower prices in these challenging economic times. “The local industry is playing its role in providing revenue to the exchequer along with providing employment. GTR alone contributes over Rs 4.29 billion annually to the national exchequer” added Hussain.
“The industry is already under pressure from the shortage of raw materials and the government’s refusal to open LCs. In our case, the majority of raw material is imported from approved sources, to which we add value to save precious foreign reserves, but the situation has been worsened by the flood of smuggled tires specifically passenger car radial tires,” he added.
The local industry is the backbone of any economy, and it comes to the Government to provide protection against these issues. These industries are creating employment opportunities in addition to foreign reserves. Amid the dollar shortage due to the economic crisis and rupee depreciation, the import of tires decreased by 47% in the first half of the current financial year, which has fuelled the illegal tire trade by creating a vacuum, as the import of passenger car tires (HS Code 4011.1000) alone witnessed the decline of 55% on YoY basis.
The Collectorate of Customs Enforcement (CCE) confiscated over 55,000 smuggled tires mainly car tires worth Rs 540 million in Karachi during the first 6 months of the current fiscal year with the majority of tires being of Chinese origin with changed specifications, serial numbers, sizes, and manufacturing dates. According to the customs, the smugglers are using different tools to make the smuggled tires exactly as per the import GDs of other imported consignments.
It is an open secret that our neighboring country Afghanistan consumption is one-third of our country. The GOP needs to do an assessment of the items being imported via the Afghan Transit Trade (ATT) to ensure that the tires being imported are in line with the vehicle population in Afghanistan. Items under the guise of ATT are either unloaded in Karachi or come back from the Afghan border via smuggling. This needs to be addressed and the customs department needs to ensure that this facility is not misused.
“To provide a level playing field to tax compliant the local industry and national treasury from the damage caused by smuggling, it is necessary to check the stock in the markets whether proper taxes have been paid or not and take action against sellers by confiscating the illegally imported tires,” said Hussain.
Lastly, he stressed that the government to take effective measures to curb the smuggling of tires to improve the competitiveness of the local industry and provide equal business opportunities to the local industry.
Source: Pro Pakistani