Govt Sets Maximum Customs Duty on Imported Cars

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The coalition government led by Prime Minister Shehbaz Sharif has imposed maximum customs duty on imported cars with rate of 90%. The cars include new sport utility vehicles (SUVs) and off-road vehicles. 

SRO by FBR

The Federal Board of Revenue issued SRO 966(l)/2022 which has a detailed list of items and rates of Custom Duties. According to this list, the government has increased the number of items from 599 to 611. Furthermore, customs duties range from 2% to 90%.

Highest Customs Duty on Cars

The highest rate of Customs Duties is 90% which is imposed on imported SUVs and Crossovers. The second highest Custom Duty slab is of 70% which is imposed on imported used and old crossovers or off-road vehicles between 1801cc to 3000cc in the Fiscal Year 2023. Both of these rates have been maintained from the previous fiscal year 2022. 

The two highest slabs of Customs Duty on imported cars will make the overall automobile market more expensive than before. With car prices increasing locally as well, it has become difficult to own a vehicle whether it is locally assembled or imported.

Capital Value Tax on Cars

Meanwhile, the government has revised the condition of implementing 1% Capital Value Tax (CVT) on cars. According to Finance Act 2022-23, CVT will now be imposed on cars above 1300cc. It is pertinent to mention that earlier this tax was imposed on cars above Rs. 5 million.

If you remember, the government stated in fiscal budget document that the 2% CVT is proposed for cars over Rs. 5 million. Then Federal Bureau of Revenue (FBR) reduced it to 1%. However, in last change, the condition of Rs. 5 million was replaced by cars “exceeding 1300cc engine and EVs with battery power over 50kwh.”

These taxes will not only increase the prices of imported vehicles but also the locally assembled one. The consumer is already burdened with inflation and record-high petrol prices, so, further jump in car prices will harm its purchase power.

What do you think about these new custom duty on imported cars? Please share your thoughts in the comments section.

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1 Comment
  1. Khurram says

    90% and 70% only, this rate should be higher, moreover, I think that the rate should be different for filer and non-filer.

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