LAHORE - As many as 816,000 units of under invoiced tyres in the passenger car category were imported in one year, causing loss of approximately Rs5 billion to exchequer.
According to the data of demand and supply of tyres of all categories including passenger car, light commercial, truck/bus bias and radial, and tractor, in the year 2012-13, total tyre demand was 8 million tyres. The local production during the said period was 1.70 million tyres which was 20% of the total demand, while the imports were 4 million tyres which was 48% of the total demand, leaving a total of over 2.3 million smuggled tyres worth Rs 25 billion, which catered 32% of the total demand.
Sources said the trend of importing tyres under the ‘other’ category is growing day by day and the concerned authorities like Federal Board of Revenue and Customs have not taken any notice of the huge loss to the national economy and local tyre industry. They revealed that the idea of designating tyres as “others” is probably to cheat the government on levy-able duties/taxes by wrongly declaring the size of the tyres and hence getting away with much less Import Trade Price (which by the way is far from reality).
Sources said Import trade price is the easiest solution to curb this menace as duty and taxes of imported tyres are calculated on ITP. FBR, through ITP, can diminish the shortfall of Rs5000 million annually in the collection of import of tyres alone. Moreover, smuggling of used as well as new tyres has mounted again owing to inefficient and ineffective role of authorities and officials who are responsible to nip illegal practices in the bud. They said tyres are openly being brought into the Country from Chaman. It is estimated close to 2.3 million tyres are smuggled annually causing a loss of almost Rs 25 billion in lost revenues.  “This is a big loss to the national economy.
This makes a huge dent in the local tyre industry that is being surpassed by smuggling,” sources said, adding that if the authorities effectively curb this smuggling it will give rise to the legal import of tyres for the benefit of the economy & GOP will get close to Rs 25 billion in duty / taxes annually.