MG HS ; Dedicated Discussion, Owner/ Fan Club Thread

[engineerjibran]

there is 17 percent sales tax as well which goes to the government and then there are freight charges of 2.5 lac per vehicles.

so add 9.5 more into 41.5 already and the cost becomes 51 lac and MG HS is being sold for 56 lac.

[r.farookee]

I must say very informed and educated discussion though with different viewpoints.However without further ado I think this is a matter which must be looked at deeply by the Competition Commission of Pakistan just as in the case of Hyundai Tucson for"deceptive selling/marketing practices.I must confess as a potential but caution consumer I would still think twice before considering to go for MG/HS.I am trying to get some advice with insiders and will share it if found worthwhile and convincing.

[capsat]

this evening happen to meet a retired engineer of Indus assembly line he was line chief when Coure was last produced, we met at NED university. Obviously MG and other Koreans were discussed. He was quiet skeptical for MG malpractices. He told me a story in which Indus Toyota was strangled and could not import CBU units for 21 months. They were allowed to import CBU units of Toyota Corona for PAF. Only Few (in double digits) EE 90 and KP 71 were imported after building infrastructure was in place and the machinery for plant was at port.

he gave a hint that 3 Jap Giants are cautiously monitoring the 6 new entrants, if need be they will involve the JETRO to take up the issue with Federal Govt Ministry of Industries, Min of Economic Affairs and the FBR.

[fazalwahab11375]

on CBU, the importer paid the 17% sales tax at the time of clearing the vehicle. Basically the 123.77% duty already have that 17% sales tax.

declared value $11632.
123.77% duty = $14394 [ 17% = $2447= PKR 384,277/ -, has be taken by the FBR as sales tax. ]

$11632+$14394 = $ 26026 = PKR 4,087,130/-
Freight, port handling charges.. altogether are around 300,000 per vehicle on average .

4,087,130/- 300,000 = PKR 4,387,130 /- [ approximately ].
Obviously they need to add dealer commission and other overheads so,

Sticker price of HS = 4,657,265/ - for buyer.
The invoice gets a 17% sales tax on sticker price = $ 791,735. [ this is what JE SEZ keeps as margin , because sales tax is already paid at import . Obviously subtract the 384,277 from 791,735 = PKR 407458/- , ]

Please correct me if I am wrong.

[engineerjibran]

wow , so once the importer pays sales tax and then the end consumer pays sales tax as well.

How much sales tax goes into governments pocket? More than 1.15 million on a 5.5 million product. More than 20 percent that is.

and a total of more than 3 million in taxes.
.3 million of freight charges.

1.86 mil the declared invoice price.

comes out to be around 5.16 mils.

0.34 mils or 3.4 lacs goes to MG?

[fazalwahab11375]

The sales tax taken on sticker price is not paid to government . Actually the companies claim it back because they already paid that on import. So basically FBR already took 17% on import.

When the vehicle is sold by company like JW in our case .. that 17% is recovered from the consumer BUT at a higher NUMBER obviously because the sticker price is not what the declared price was on import.
In simple words. JW SEZ keeps the PKR 407458/- per unit.

again, I am not an export in these..

[fazalwahab11375]

BTW Honda Atlas declared Price for Accord 1.5T is around $29,000.

Atlas is selling Accord for 11,999,000/-

if we do a quick math, 29000 + 35893 [123.77 duty ] = $ 64893/-
= PKR 10,191,445.

[waqar747]

This is mostly correct except that sales tax at import is a total of 20%.
And total sales tax paid is the one on the sticker price (this total minus the amount already paid at import is the amount submitted to FBR in the end.)

[khancan]

Guys. One question to all those who are saying imports are not allowed or how come MG is importing so many cars...
How is Toyota importing Land Cruiser, Prado and Camry?
How is KIA imporring Grand Carnival?
How is Honda importing Accord?
How are Audi BMW and Mercedes importing their cars?

[pwuser159259702854]

The problem people have is not that all manufacturers can import cars if full duty is paid the problem is with the price declared by MG upon import that is lower then what the price is abroad

[pwuser159259702854]

Kia bmw Audi Honda etc are importing cars with full duty according to their value

[engineerjibran]

so JW sends back 11632 dollars or 1.86 million back to SAIC china , 0.3 million to the freight , and 2.3 million to the government of pakistan and thats the total of 4.46 million which are only Mg-jw expenses.

Rest goes to their pocket as they do not pay the sales tax given by the constomer to them , right?
They earn about 1.04 mil per car if these calculations are right.

We can minus dealers commission as well as the figure may come down to 7 8 lacs

[uzeemujeeb]

one thing for sure

yes FBR has produced evidence of under invoicing by MG Pakistan. base price is always available to Govt entities through proper channel. calculating freight insurance and misc charges is peanuts.

which one of above person in pakistan military uniform will endorse that cheat sheet comparison as legal? None

in the same breath i can say if we have people like Chauhdary Iftekhar & Saqib Nisar in the Top court the Afridi will WIN,

[rahulthemexican]

Believe me, as much as I am critical d this govt no person wearing a uniform has any intention of getting involved in business matters just to import a few chinese cars... they have so much more to focus on rn, the whole country is in a tight place, they need to keep it together.

Javed afridi and customs, excise involved in this game are going to suffer alone.

Also this picture is taken out of context, you can see international players lining up, it's not about javed afridi or MG, it's about bringing cricket to pak. Neither they support MG, nor are they against it.

Winning a case doesn't mean its closed and done for. Those decisions can be appealed in different circumstances, under different judges, with a different government in power. Especially with the billions of $$ involved in stolen taxes. We have seen the last govt removed as a shining example of this.

[Panther]

Out of context post. Don't follow the agenda of idiotic politicians based on ulterior motives.

[r.farookee]

This does not make sense that expensive cars are allowed by the automobile companies on payment of full duties.Why can't people be allowed to import these cars directly after payment of all duties/taxes.However as mentioned in my post elsewhere perhaps under MG's thread this issue must be taken up by Competition Commission of Pakistan.

[pwuser159259702854]

[pwuser159259702854]

This got teased on MGs social media platforms I think it will be better then ZS ev as a plug in hybrid is more suitable for Pakistan and looks more likely to be launched then MG 3 or gloster as this time it has been teased by MG themselves

[pwuser159259702854]

https://mobile.twitter.com/JAfridi10/status/1370282720706846721

[fazalwahab11375]

Good to know.. the clock is ticking anyway as the policy is near expiration. Let's see a CKD MG in 2 months and I hope CKD is as well built and featured as the CBU.