divtext-align: justify""KARACHI, June 20: One of the leading Japanese car makers has increased the price of its various models by Rs23,000 to Rs80,000 for regular customers following imposition of five per cent withholding tax on ex-factory selling price and special one per cent surcharge on imports.
The car assembler has also issued the new retail price for the federal and provincial governments’ organisations, foreign diplomats and diplomatic missions on which the five per cent withholding tax does not apply. With the exemption of withholding tax, these organisations will have to bear a slight increase of Rs4,000 to Rs13,000 in car prices depending on the models mainly due to one per cent surcharge, which is now called special federal excise duty (FED).
The impact of only five per cent withholding tax can be gauged from the fact that the government will collect the tax from the customers from a minimum of Rs18,952 to a maximum of Rs66,617 depending on the models.
Makers of Honda, Suzuki and Dewan Farooqui Motors have not announced the new rates on June 19, but they may come out with new prices this week.
Indus Motors Limited (IML), makers of Toyota Corolla, has issued a circular to all its authorised dealers saying that the new prices will apply to all orders to be booked from July 1, 2007 onwards.
----The circular says that any impact on prices due to changes in government levies, tariff, fiscal policies, and import policies etc, will be on account of the customer.
The new price of Corolla XLi, GLi and 2D will be Rs933,000, Rs1,028,000 and Rs1,102,000 as compared to Rs879,000, Rs969,000 and Rs1,039,000 earlier. The 2D SE and 2D saloon will be priced at Rs1,187,000 and Rs1,357,000 as compared to Rs1,119,000 and Rs1,279,000. Altis automatic and manual versions will be available at Rs1,399,000 and Rs1,304,000 as compared to Rs1,319,000 and Rs1,229,000.
Cuore CX, CX metallic and CX CNG will be sold at Rs461,000, Rs486,000 and Rs503,000 as compared with Rs434,000, Rs439,000 and Rs474,000. Cuore CX CNG, CX automatic and CX automatic metallic will have a price tag of Rs508,000, Rs493,000 and Rs498,000 as compared with Rs479,000, Rs464,000 and Rs469,000. The CL and CL CNG versions will be priced at Rs398,000 and Rs441,000 as compared with Rs375,000 and Rs415,000.
Meanwhile, an assembler said that companies still require a number of clarifications from the government over the withholding tax. He said that a sizable number of cars were sold through leasing companies and banks and it was not clear as to how they would adjust the five per cent withholding tax with the customers.
He said many customers had booked cars this month and they might be getting deliveries in the first week of July. It is also not clear whether they will have to pay the increased price or not.
However, the five per cent withholding tax will be adjusted against the income tax paid at the end of the year by these customers, corporate and multi-national employees, who fall in the tax net. But ultimately, non taxpayers will have to bear the burden of inflated prices.
Meanwhile, market sources said that premiums on Toyota and Cuore, which had almost vanished, had again emerged. The premiums on locally assembled cars had now jumped with almost same amount as price increase by the company in its June 19 circular.
Premium on Corolla XLI and GLI, which was ranging between Rs8,000 and Rs10,000, has now surged to over Rs60,000.
There was no premium on Corolla’s diesel versions and even on its Altis but it has emerged at the rate of Rs50,000 on diesel and Rs25,000 on Altis. The on money on Daihatsu Cuore has jumped to Rs45,000 from Rs12,000-Rs15,000.
Chairman All Pakistan Motor Dealers Association (APMDA), H.M. Shahzad said that the government’s decision of capping imports of used cars to three years has pushed up the premiums as imported used cars would definitely be priced much higher, thus making these uncompetitive with locally assembled new cars.
Customers will be bound to rely on locally assembled cars as the government had taken the option from the customers to select the used cars suited to their incomes.
http://dawn.com.pk/2007/06/21/ebr6.htm