Ghandhara Tyre CEO Hussain Kuli Khan stated that tire smuggling has crippled the industry, with a significant increase in the last six months alone.
Yearly Smuggling of Tires
According to reports, the smuggled tires are of poor quality and are widely available in all major city centers. Despite the lower quality, they are attracting customers due to lower prices in these difficult economic times.
“The local industry contributes to the exchequer while also providing jobs.” “GTR alone contributes over Rs 4.29 billion to the national exchequer each year,” Hussain added. “The industry is already under pressure due to a lack of raw materials and the government’s refusal to open LCs.”
In our case, the majority of raw materials are imported from approved sources, to which we add value in order to save valuable foreign reserves, but the situation has been exacerbated by a flood of smuggled ones, particularly passenger car radial tires,” he added.
Local industry is the backbone of any economy, and it is up to the government to protect it from these issues. These industries generate employment opportunities as well as foreign reserves.
Due to the economic crisis and rupee depreciation, the import of tyres decreased by 47% in the first half of the current fiscal year, fueling the illegal tyres trade by creating a vacuum, as the import of passenger car tires (HS Code 4011.1000) alone decreased by 55% on a year-on-year basis.
During the first six months of the current fiscal year, the Collectorate of Customs Enforcement (CCE) confiscated over 55,000 smuggled tires, mostly car tires, worth Rs 540 million in Karachi, with the majority of tires being of Chinese origin with altered specifications, serial numbers, sizes, and manufacturing dates.
According to customs, the smugglers are using various tools to precisely match the import GDs of other imported consignments. It’s no secret that our neighboring country Afghanistan consumes one-third of what we do.
The GOP must assess the items imported through the Afghan Transit Trade (ATT) to ensure that the tires imported are appropriate for Afghanistan’s vehicle population.
Items disguised as ATT are either unloaded in Karachi or smuggled back from the Afghan border. This must be addressed, and the customs department must ensure that this facility is not abused.
“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.
Finally, he emphasized the importance of the government taking effective measures to combat tire smuggling in order to improve the competitiveness of the local industry and provide equal business opportunities.
To raed our blog on “China sold 59% of the world’s NEVs in Q1, 2023,” click here