The Public Accounts Committee (PAC) has ordered the Federal Board of Revenue (FBR) to re-investigate MG’s alleged under-invoicing of CBU vehicle imports.
The FBR had closed the case after verifying that the claims of under-invoicing were baseless, but the new government has requested a reinvestigation.
Allegations
Following the PAC order on Tuesday last week, several significant personalities, including senior journalists Syed Kousar Kazmi and Syed Talat Hussain, as well as former Defense Minister Khawaja Asif, spoke out against the automaker.
According to one of the journalists, the previous administration forced customs officers to under-invoice the automobiles. He went on to say that at first, the customs department cleared 1,000 MG units based on the member operations’ verbal instructions, with a claimed value of $11,000 per unit.
“In the meantime, the same vehicle’s CKD kits were being approved at $16,000 per vehicle at Lahore Dry Port,” he stated.
In a tweet, senior journalist Kamran Khan suggested that the pre-existing automakers are a factor in PAC’s re-investigation directives, alluding to a senior FBR official.
MG’s Answer
The corporation has also broken quiet regarding the problem. “The MG import scandal is utter deception to damage officers’ image and target Chinese investment in Pakistan negatively,” a senior corporate executive stated.
He said that the corporation had previously experienced the same probing process and come out unscathed. He emphasized the following:
“All the SUVs like Toyota Rush, Prince Glory, Proton, Changan have been imported and cleared at declared values whereas only the value of MG vehicles is enhanced and extra duties and taxes up to 1.1 billion have recovered from the importer of MG vehicles”
The corporation also made the following comments in response to the notice of “misplaced investigation’s assumptions”
- The PAC is relying upon only 24 kits for its comparison between CKDs and CBUs, whereas the total number of CBU vehicles is over 10,000.
- The company imported CKD kits only as Pre-Production Vehicle (PPV) kits to assemble high-quality sample vehicles as proved by their import documents. The company is yet to begin the full-scale local assembly of its vehicles in Pakistan.
- The freight charges of these kits —as mentioned on import documents — are $1,400 greater than that of CBU vehicles.
- These kits have been imported in high-quality packaging which cost up to $900. The packaging is to preserve the kits for longer periods of time.
- The steep rise in the prices of microchips in the international market added up to $800. Hence, these facts demonstrate the price difference between CKD kits and CBU vehicles.
Javed Afridi has also defended MG, saying that all relevant organisations are allowed to undertake “any kind of probe.” In the re-investigation of the under-invoicing case, MG is ready to go toe-to-toe with the investigators.
To read our blog “MG intends to assemble and launch these vehicles in Pakistan,” click here