The current government presented the Fiscal Budget 2023-24 today in the National Assembly. As usual, there is excitement and a lot of confusion over the possible taxes and duties on cars and the auto industry. Now, a copy of Finance Bill 2023 is available to different media and news outlets. The only part about vehicles in this bill is on Completely Built Unit (CBU) HEVs and their taxes. If one reads that part, it seems that there is a huge concession for HEV CBUs, and several outlets have jumped the gun and announced this “exemption.” But is it true? Apparently not.
The Explanation (Budget 2023-24)
Now fold your sleeves, and fasten your seatbelts because here is the explanation:
- First thing first, the exemption is not for HEV crossover SUVs or sedans; in short, no passenger car comes under this offer. To understand it correctly, you must examine the PCT Codes mentioned in the Finance Bill.
- The primary PCT Code is 8702, which is for “motor vehicle for transport of ten or more persons, including the driver.”
- The 2090 and 3090 with 8702 are the subcategories that explain the exact vehicle type. For instance, 2090 is for the vehicles used for goods transport.
- In short, the 1% Customs Duty (CD) is applied only on commercial vehicles, but there is another catch.
- This concession “will only be offered if the local companies plan to manufacture/assemble the vehicle locally.” So, if the companies do not plan to assemble these vehicles locally, they have no concession.
- Meanwhile, the 4% CD on the import of parts of HEV and 3% CD on Plug-in Hybrid Electric Vehicle (PHEV) are unchanged; there is no concession or exemption in this regard.
So, this is the explanation, and we have shared the information with you in straightforward words so you can understand it without any issues.
What is your take on Fiscal Budget 2023-24? Tell us in the comments section.
