Overview
Today we have come with bad news and good news. The good news is small so we will disclose it after announcing a shocking burden of 25% GST on 1400cc and above cars. After couple of days wait the Federal Board of Revenue (FBR) announced that CKD units considered for new sales tax notification SRO 297(1)/2023. Under the SRO the FBR announced a 25% General Sales Tax (GST) on luxury items and cars above 1400cc included in the tax slab.
However, automakers have just received a notification from the officials and a new wave of price hikes will drop down in the next few hours or tomorrow. This time prices of cars will surprisingly increase. We have already posted an estimated prices for 1400cc and above cars after 25% GST.
25% GST Confirmed for 1400cc and Above Cars
The FBR notification cleared all doubts about the 25% GST divination because it comes with a call of “locally manufactured or assembled SUVs and CUVs” added under the tax. Meanwhile, most popular sedan cars are also powered by above 1400cc engines and are part of this tax implementation.
Automakers mentioned in their previous price hike notification that they reserve the right to change prices according to the new govt taxes and that customers should pay the amount at the time of delivery.
All Sport Utility Vehicles (SUVs) and Crossover Utility Vehicles (CUVs) designed in Pakistan offered with above 1400cc engine power. The changes in tax target these vehicles. SUVs and 4×4 vehicle lovers will face new challenges in buying a favorite vehicle.
Cars Not Included in the 25% GST
Suzuki car buyers has good news even after the 25% GST because it’s not included in SRO 297(1)/2023. Suzuki offers below 1400cc engine cars in Pakistan. Still, you have the option to buy Pak Suzuki Alto, Swift, and Cultus. Riding with this vehicle also cost you cheap because of low engine displacement. Suzuki Alto was the most economical choice for buying and running. But recently Suzuki has announced a huge decline in the sale of Alto. Suzuki has only sold 544 units of Alto in the previous month. Although, heavy-engine vehicles cost you high for running due to the sky-touching fuel prices in Pakistan devaluation of money affects the overall car prices.
Conclusion
The automotive industry faces serious troubles with taxes which forced to increase prices. Taxes and dollar fluctuation cause to far away heavy engine car purchase from customers. No choice left for customers except to avoid car purchase. Automakers announced a couple of plant shutdown notifications in the last few months due to the non-productive days.
