The decision was made after a meeting with the representatives of PAMA on last Friday. The meeting was convened to initiate deliberations among the stakeholders in order to finalize consolidated proposals for the incumbent government to drag auto industry out from ongoing crunch as the auto sales and production slid down by 41.4% due to increase in prices, rupee depreciation, reduction in car financing, increase in Federal Excise Duty (FED) and high input cost.
According to sources, the representatives from PAMA during the meeting suggested forwarding a proposal to the government, requesting to withdraw Federal Excise Duty (FED) from 2.5 to 7.5 percent, which was imposed in the federal budget 2019-20 and if it was not accepted then it would be challenged in the court.
However, the PAAPAM representatives appeared reluctant to support PAMA recommendation and decided not to be a part of any aggressive move that would aim to create pressure on the government.
Talking to Business Recorder, Capt Muhammad Akram (retd), who recently took the charge of chairman PAAPAM, said that they would not support PAMA in any agitation against the government.
He confirmed that PAMA floated the proposal to move the court, if the authority concerned did not withdraw FED; adding that additional duty on components would not affect PAAPAM members as it was being passed on to buyers.
Furthermore, he said that government was not in a position to compromise its revenue and withdraw FED during current economic situation and added that OEMs should increase localization in order to give stability to the auto sector and mitigate the impact of rupee depreciation that was badly affecting the industry.
He said that PAAPAM members confined themselves to only auto sector however they could not only expand their horizon and serve for other sectors but also exploring international markets in developed world to avoid the impact of ongoing economic crunch. Moreover, chairman PAAPAM said that he and his team would now focus on discovering exports opportunities for their members.
Abdul Waheed DG PAMA, who is out of country, could not be reached for his comments.