The Excise Taxation and Narcotics Control Department (ET&NCD) Punjab is taking into consideration for the subtraction of Luxury tax on all imported vehicles in the province.
The luxury tax plans at endorsing local automobile industry by creating imports pricey and putting a damper on things by increasing import of vehicles and the outflow of foreign exchange,
Not Registering in Punjab
It has been appropriately illustated that buyers are keeping away from paying this tax in Punjab and rather have a preference to go to Islamabad to have their cars registered. This is because of the difference in the tax on a provincial level thereby causing a negative effect on foreign exchange.
Government representatives stated,
“Due to lesser registration rates and quarterly token tax payments, majority of the imported vehicle owners prefer ET&NCD Islamabad, instead of Punjab that takes yearly token tax payments.”
New Tax
A new tax on imported vehicles with an engine capacity of over 1,300 cc was put into service back in June 2016. According to this taxation policy, the buyers were legally responsible to pay an amount of Rs. 70,000 for a vehicle over 1,300 cc, Rs. 150,000 for a vehicle over 1,500 cc, Rs. 200,000 for 2,000 cc and above, and Rs. 300,000 for a vehicle with an engine capacity of over 2,500 cc.
This tax is charged independently, adding to the list of customs duty, token tax, income tax, professional tax, registration fees, and maintaining tax already charged from vehicle importers.
Officials have informed that in meetings held in May 2017, a fine was well thought-out for car owners who had registered their vehicles in provinces other than Punjab. The Motor Vehicle Ordinance Act of 1965 also states that a vehicle has to be reapplied to ET&NCD for registration if it stays in a province for more than 120 days.
No Crackdown on Tax Avoidance
An additional proposal talked about was a concentrated effort on vehicle owners who kept away from this tax and to make them register again with the provincial excise department. Nevertheless, this proposal was unused .
The excise and customs officials have also stated that the number of registrations in the province is on the process of amplification if this tax gets removed, therefore totaling revenue to the excise department.
