Mini-Budget Passed – FED & GST on Cars REVISED!

1 27,680

And the wait is finally over; the federal government has passed the Finance (Supplementary) Bill 2021, also known as mini-budget, from National Assembly. If you remember, the government proposed several Federal Excise Duty (FED) and Sales Tax hikes for locally assembled and imported cars.

Now the bill has been passed by the assembly. Here are the revised rates of FED on different cars.

FED on Locally Assembled Cars

As per the mini-budget document, following are the new FEDs on locally assembled cars:

  • 2.5% on 0-1300cc cars. It is pertinent to mention that FED on 0-1000cc was 0%.
  • 5% on 1301-2000cc cars. Earlier, the duty on 1001-2000cc was 2.5%; however, the government has now changed the categories of engine size. 
  • 10% on cars above 2000cc, which was 5% before the mini-budget.

In short, prices of all cars will go up. So, be ready for another price hike by the car companies.

Mini-budget PakWheels

GST on Hybrid and EVs

According to the available document of the bill, the following percentage of General Sales Tax (GST) will be applicable on locally assembled hybrid cars:

  • 8.5% on hybrid cars up to 1800cc
  • 12.75% on hybrids from 1801-2500cc

Meanwhile, for CBU/imported electric vehicles there is: 

  • An increase of GST to 12.5% from the previous 5%.

Mini-budget PakWheels

RD on CBUs

These hikes in taxes will undoubtedly impact the buying power of the common masses. The step came after the government increased Regulatory Duty (RD) on imported/CBU cars.

Here are the details: 

  • RD on conventional engine cars over 850cc but not more than 1,800cc increased from 15% to 50%.
  • RD on all CBU hybrids, with an engine capacity of over 1,500cc but not more than 1,800cc, increased from 15% to 50%, 
  • Imposition of 10% RD on EVs with battery packs of over 50kWh. However, commercial trucks and buses are not included in it.

This means the taxes and duties on both locally assembled and imported have been increased. Times are tough and going to be tougher.

What do you think about these news taxes and duties? Share your thoughts in the comments section.

 

Google App Store App Store
1 Comment
  1. Khurram says

    I am speechless, if trade deficit can be improved by changing tax rates, why then were these reduced in the first place? The government needs to ensure that so-called educated people available locally are used for making cars by auto assemblers.

  2. Ali says

    We need robin hood to be saved from taxes !

Leave A Reply

Your email address will not be published.