The interim government has implemented an abrupt measure, leading to a direct hike in prices for all cars priced at Rs. 40 lacs or below with an engine capacity below 1,400cc. This increase results from raising the General Sales Tax (GST) on these cars from 18% to 25%. It’s important to note that cars above 1,400cc already incur a 25% GST or Luxury Tax.
As per reports from the media, the Economic Coordination Committee (ECC) approved the proposal titled “Rationalization of Criterion of Enhanced Rate of 25% Sales Tax on Locally Manufactured/Assembled Vehicles” on Wednesday. Economist Ali Khizer, in an explanation to PakWheels.com, clarified that vehicles exceeding Rs. 40 lacs would now fall under the category of luxury vehicles and face a 25% tax rate. Notably, hybrid and electric vehicles (EVs) are exempt from this new tax regulation, according to him.
Meanwhile, analyst Abdul Rehman conveyed through a tweet that any car with an engine capacity of 1000cc and above is now considered a luxury vehicle in Pakistan, as the ECC has sanctioned a 25% sales tax instead of the previous 18% for all cars valued above Rs. 40 lac. He added that previously, a 25% luxury tax was applicable to cars with an engine capacity of 1400cc and above.
Any 1000cc+ car is now a luxury in 🇵🇰🇵🇰
— Abdul Rehman (@AbdulRehman0292) February 15, 2024
ECC has approved 25% sales tax instead of 18% for all cars valued above Rs40 lac.
Earlier, 25% luxury tax was applicable on 1400+cc cars.
Cars to be impacted
If 25% GST is implemented on cars above Rs. 40 lacs and engine capacity below 1,400cc, then the prices of these cars will be increased in the coming days.
Suzuki Cultus VXL (Rs. 4,084,000)
Suzuki Cultus Auto Gear Shift (Rs. 4,366,000)
Suzuki Swift GL Manual (Rs. 4,336,000)
Suzuki Swift GL CVT (Rs. 4,654,000)
Suzuki Swift GLX CVT (Rs. 5,040,000)
Toyota Yaris GLI MT 1.3 (Rs. 4,399,000)
Toyota Yaris ATIV MT 1.3 (Rs. 4,659,000)
Toyota Yaris GLI CVT 1.3 (Rs. 4,689,000)
Toyota Yaris ATIV CVT 1.3 (Rs. 4,899,000)
Toyota Yaris AERO CVT 1.3 (Rs. 5,099,000)
Honda City 1.2L M/T (Rs. 4,699,000)
Honda City 1.2L CVT (Rs. 4,829,000)
Proton Saga 1.3L Ace A/T (Rs. 4,099,000)