Sales Slump and GST Rumors Threaten Industry Stability
The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has voiced its opposition to the potential imposition of Goods and Services Tax (GST) on the tractor industry. This comes amidst concerns over declining sales and the impact on farmers’ income.
Key Points:
- Tractor parts industry faces a downturn despite a stable sales year in 2022-23.
- Sales are currently 50% below production capacity due to various factors.
- Low farmer income caused by a lack of government support for wheat prices is impacting tractor sales.
- Rumors of GST on tractors further raise concerns for the industry’s future.
Historical Impact and Recommendations:
PAAPAM highlights the historical sensitivity of the tractor industry to changes in GST regimes and government subsidies. Periods of zero-rated GST and subsidies have seen sales flourish, exceeding 70,000 units annually. However, these policy shifts create a boom-and-bust cycle that hinders industry stability.
PAAPAM urges the authorities to:
- Abandon plans for GST on tractors.
- Continue the tractor loan scheme to support farmers’ purchasing power.
- Recognize that a prosperous farming community is vital for national progress.
