Confirmed – 25% GST on 1400cc & Above Cars, SUVs and CUVs
Another day, another tax confirmed for the local auto industry as the Federal Board of Revenue (FBR) issued a new sales tax notification under SRO 297(1)/2023, taking the net slab of General Sales Tax (GST) to 25% on luxury items. And as we told you a couple of days ago, the government has included locally assembled 1400cc and above cars, locally manufactured or assembled SUVs and CUVs, and locally manufactured/assembled double cabin (4×4) pickup vehicles.
So, it is confirmed that there will be a new wave of price hikes in the coming days, and this one will be very high. So, brace yourself for the impact, the impact of expensive cars.
The notification read that under Sales Tax Act 1990, the federal government is pleased to direct the sales tax, which should be charged, levied, and paid at the rate of 25% of the value of the imported goods and their subsequent supply or the retail price, as the case may be.
SUVs, CUVs, and 4×4 Included
The notification has specifically mentioned “locally manufactured or assembled SUVs and CUVs” under the new tax net. All the Sports Utility Vehicles (SUVs) are already above 1400cc in Pakistan, so there is no guess there; however, there was confusion about Crossover Utility Vehicles (CUVs) and whether new GST is implemented on them or not. To confirm it, we asked an official of FBR, and he told PakWheels.com that “yes, all SUVs and CUVs.”
This means that the 25% GST is also applied on CUVs in Pakistan, i.e., Peugeot 2008 and Kia Stonic, although both are under 140cc. For reference, 2008 has 1199cc, while Stonic comes with a 1368cc engine displacement.
The third clause of this section also mentions 4×4 double-cabin vehicles, meaning the Toyota Revo and Isuzu D-Max would also see a price hike. It is pertinent to note that these vehicles were included in the commercial section of cars earlier.
Estimated Price Hikes after 25% GST
We have already shared the estimated prices of all 1400cc and above cars in detail, and you can read about them here. Our calculation shows a huge jump in the prices of these cars, which will surely hamper the industry and, at the end of the day, the consumers.
What do you think about 25% GST on 1400cc and above cars, SUVs, and CUVs? Please share your thoughts in the comments section.
