The government in the Finance Bill has proposed to slap supplementary duties (SD) on imports of completely built units (CBU) of over 250 cc motorcycles – 100% on ones having four-stroke engines and 250% on those with two-stroke engines.
Some motorcycle enthusiasts, keen to get rid of the bizarre restriction on motorcycle engine capacity for two-decades, are confused if the government is going to allow imports of CBU units of over 165 cc motorcycles for the mass market.
Industry experts said, "No".
"The government, earlier this year, categorically told us that it would not allow CBU imports of over 165 cc bikes," said Safat Ishtiaq, head of business operations at Asian Motorbikes Ltd, which is working to locally manufacture higher cc Kawasaki motorcycles by the end of next year.
Also the latest Import Policy Order, issued a few months ago, does not allow imports of CBU bikes with an engine capacity of more than 165cc for the people, while such bikes can be imported for the country's law enforcement agencies only under special arrangements, he decoded the policy.
The Import Policy Order says local manufacturers of 165-500cc motorcycles can import all their necessary parts and raw materials, while the manufacturing and local riding of motorcycles has been restricted within 165cc.
Interpreting the policy order as the much-desired opening up of the local roads for up to 500cc bikes, if and only if manufactured locally, Ifad Motors and Asian Motorbikes are investing for facilities to manufacture higher cc bikes.
Also, some of the existing manufacturers are planning to extend their production lines for higher cc models.
Ifad Motors is set to manufacture Royal Enfield motorcycles by 2023.
Now, motorcycle lovers' confusion: "Why the changes in import duty structure?"
Safat Ishtiaq said through slapping SDs on big bikes the National Board of Revenue (NBR) merely rationalised the duty structure for the motorcycle segments irrelevant for the people until the Import Policy Order changes in favour of higher cc CBU motorcycle imports.
Imported CBU units up to 165cc motorcycles are subject to over 150% duties and taxes in total, which had been at around 60% for the import-prohibited over 250cc motorcycles.
To inspire the companies interested in local manufacturing of higher cc motorcycles, the NBR in its statutory regulatory order on Thursday said locally made big bikes are going to face less than 60% total taxes and duties on the import value of their raw material and parts.
A manufacturer may bring down the duty-tax burden to around 35% through more investments for more local value addition under type one manufacturing that includes making frames and a few other important parts from metal sheets or tubes, engine assembling.