Overview
The situation of imposing 25% GST on luxury items makes trouble to ensure what engine capacity would be included in it. If the govt includes 1400cc cars as luxury items summary sedans become hugely expensive.
Earlier, the govt has announced an increase of 1% GST on luxury items and considered all category cars. This time the 25% GST increase also consider for the luxury item and cars are part of it. These jumps in taxes make cars luxurious items because after every announcement by the government car makers changed the prices quickly.
Expected Hike After 25% GST
The new wave of increases in GST would bring a huge increase in car prices. If the summary regarding 1400cc cars approve Toyota, Honda, and Changan cars will no longer consider for economical buying. Meanwhile, the Suzuki car will not include in this new wave because the company has offered below 1400cc cars in Pakistan.
If 25% GST announce for 1400cc cars Toyota Yaris, Changan Alsvin, Honda City, Toyota Corolla, and Honda Civic will be included in the jump. And sedan prices will jump by more than Rs, 5,576,000.
On the other side if only 1800cc cars will be considered the price of the Toyota Fortuner Legender reaches Rs. 19,186,000 against the current price of Rs. 18,112,000.
There are two situations surrounding this, the one is the govt has no choice except to include the 1400cc cars in 25% GST. In case the officials only consider 1800cc cars then the SUV and crossover will be more away from purchasing range. If 1400cc cars will consider in GST jump be prepared for another wave of price hikes.
What FBR Say?
The official of the Federal Board of Revenue (FBR) said that decision about the 25% GST on cars has not been approved yet. The summary regarding new GST has been sent already. Implementation completely depends on the Ministry approval statement.
Conclusion
We have to wait until the FBR announcement and decision on new tax implementation. An official of FBR stated that the statement will come to us in the next two or three days. Ready yourself for another shock in car prices. Because this time it’s not a 1% it’s a 25% increase which might bring prices unexpectedly huge
