MG denies under-invoicing in auto imports

KARACHI: British automotive marque Morris Garages (MG) on Saturday denied allegations of under-invoicing in auto imports, saying the company is not under investigation by the tax authorities.

“The rumours relating to under-invoicing are absolutely false and baseless and are nothing but a panic response to the tremendous success of the introduction of British automobile brand MG in Pakistan,” the company’s spokesperson said in a statement.

The spokesperson said MG Pakistan has succeeded in purchasing MG HS directly from its principal/manufacturer (SAIC). Since the actual / declared price is paid to the principal SAIC, it cannot be called under-invoicing.

“Ultimate beneficiary of the negotiated price is valued customers, a rare phenomenon in the Pakistani auto mobile sector,” said the official.

“The FBR [Federal Board of Revenue] is not investigating any under-invoicing by MG Pakistan.”

MG JW Automobile (MG Pakistan) is a joint venture between JW SEZ and SMIL. SMIL owns the majority shares in the joint venture and is a subsidiary of SAIC, which is the largest auto manufacturer in China and the seventh largest in the world. In 2006, SAIC purchased the prestigious British brand MG and is now marketing automobiles under the brand all over the world.

The official said SAIC’s joint venture company is setting up a local assembly plant for MG automobiles in Lahore.

MG Pakistan requested prospective customers to approach MG Pakistan to seek any clarification relating to the products and business of MG Pakistan.

“Without verifying any fact, spreading news is unethical, against journalistic norms, and damaging for the emerging auto industry of Pakistan and it may also entail serious legal consequences should MG Pakistan decide to resort to legal action,” said the official.

“MG Pakistan will continue to honor its commitments and the company also assures its customers and business partners of its unwavering commitment to serve the automobile industry of Pakistan by promoting competition and higher value at lower prices.”

According to the media reports, the company imported over 500 complete built-up units from China, predominantly MG GS Model. The declared customs value of $11,632 per unit which is too low. The same model is being sold at a price above $27,000 in other countries.

A report said the under-invoicing evidence has also been shared with other line ministries and agencies for a thorough probe “as this is inflicting billions of rupees financial loss the exchequer”. “The company has allegedly evaded over Rs1 billion in duty and taxes so far."