Govt Imposes 25% GST on Cars Above Rs 40 Lacs

The Federal Government has finally imposed 25% General Sales Tax (GST) on cars costing above Rs. 40 lacs, according to SRO 370(I)/2024. The notification stated that the Federal Government was pleased to order the amendments to No. S.R.O 297(I)/2023 that was issued on March 8, 2023.

According to the notification, the 25% General Sales Tax (GST) will be applied to the following vehicles:

• Locally manufactured vehicles with engine capacity of 1400cc and above.
• Locally manufactured vehicles with invoice price (excluding sales tax) exceeding Rs. 4 million.
• Locally manufactured or assembled double cabin (4×4) pick-up vehicles.

Here is the copy of the notification:

Furthermore, it is pertinent to mention that 25% GST was already applicable on vehicles with engine capacity of 1400 or above, while the new circular implements the same tax on vehicles costing above Rs. 40 lacs regardless of their engine capacity.

It is expected that price of several popular vehicles like the Suzuki Cultus and Suzuki Swift will see a massive hike due to the implementation of the new General Sales Tax (GST). However, we will have to wait for new prices to be released by the companies in line with the new taxes.

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