Millat Tractors Limited (MTL), a leading local tractor manufacturing company, raised the basic price of tractors second time in six months to be effective from June 21, 2013, citing increase in costs of various inputs. The two local tractor manufacturing companies, ie MTL and Al-Ghazi Tractors Limited raised price of tractors by five percent in the wake of the rate of increase in General Sales Tax (GST) from five to ten percent on December 12, 2012 and January 1, 2013 respectively.
The company, in its correspondence with all its dealers and banks, has intimated that all booking registered with MTL up to June 20, 2013 shall be delivered at current prices subject to the condition that all the deliveries are availed up to June 30, 2013.
According to the letter, the price of MF-240(50 hp) is being increased to Rs 698,000 from Rs 635,000 inclusive of 10 percent GST whereas the price of MF-350 plus (50hp) will be Rs 748,000 instead of Rs 680,000. The new price of MF-260(60hp) will be Rs 775,500 against existing price of Rs 705,000. The rate of MF-350(60hp) has been increased to Rs 799,700 from Rs 727,000. The new price of Mf-375(75hp) will be Rs 1,016400, MF-385(85hp) Rs 1,311,900 and MF-385 4 WD (85hp) has been notified at Rs 1,686,300 from Rs 1,533,000. MTL had increased the price of a tractor by Rs 30,000 from December 12, 2012 onward.
MTL has directed its dealers that all instruments of June 20, 2013 or earlier must reach the company latest by June 25, 2013 against the bookings registered at current prices. The company maintains that in case ZTBL/commercial banks, the SOs issued up to June 20, 2013 and received at MTL by June 30, 2013 will be considered at old price.
For pending bookings of ZTBL/commercial banks, where the intimation letters have been issued and demand drafts are awaited, if issued by the branches up to June 20, 2103 and received by the company up to June 25, 2013 will be delivered at current price.
For quotations issued to the institutions up to May 31, 2013 the tractors will be delivered at old price if confirmed order and payment is received up to June 30, 2013. The orders against Sindh tractors scheme will be delivered at prices agreed with Government of Sindh if booked up to June 30, 2013. Informed sources told Business RecorderMTL’s competitor Al-Ghazi Tractors Limited is also planning to increase price of tractors at the same rate as MTL.
An official on condition of anonymity told this scribe that the tractor companies are earning huge profit by depositing the amount of GST in banks. The amount of GST is being paid to the government after about two months. Unconfirmed reports also suggest that tractors are being smuggled to Afghanistan and return to Pakistan due to which the government is inflicted with loss in revenue. These tractors come out from the factories without sales tax invoices. Tractors of Green Tractor Scheme of Punjab Government and Sindh Tractor Scheme are also being smuggled to Afghanistan after change of colour and then smuggled back to Pakistan.