ISLAMABAD - In yet another development, the government is all set to impose 10 per cent duty on import of tractors in budget 2012-13, say sources.
The imposition of duty on import of tractors will go a long way to boost local tractor industry and could further enhance the sale of locally manufactured tractors and bring down its prices.
Sources familiar with development told Online Tuesday that government did want to impose 10 per cent duty on import of tractors because local industry was significantly global competitive. Currently, the import of tractor is zero rated but now government has proposed to give some duty protection to tractor industry by imposing duty on its import. “There are different levels of high duty production for almost all local industries including buses, cars and motorcycles but the import of tractors is exempted from any duty at present and its import is allow on zero-rated,” said sources, adding that there was also no trend in the world to give subsidies on foreign products but government of Pakistan had been giving Rs.20, 0000 subsidy per tractor.
The sources further said that the government had already reduce general sales tax (GST) on tractors from 16 percent to 5 per cent to help tractor manufacturers, hundreds of vending units and the cash-starved farming community, however, the rate of GST will be brought to 5 percent in next four to five years. Reduction in GST had made tractors cheaper by Rs60, 000 to 100,000 per unit.
“Industry and vendors are now satisfied as the government had taken a step to clear a confusion which led to a decline in tractor sales and left some 20,000 people related to the industry jobless,” added the sources.
It is relevant to mention here that the tractors production in 2001/02 stood at 23,801 units that peaked in 2006/07 to 54,052 units remained almost stable during 2007/08 at 53,703 units and surged to 59,968 units in 2008/09 when the auto industry went in deep recession. In 2009/10 tractors production surged to72, 989 and remained stable at 72,261 in last fiscal year 2010-11.During first nine months (July-March) of current financial year 2011-12 tractors production declined to 27,131 unites.