25% GST Imposed on 1400CC Cars and Above

Another price hike is imminent as the Government has just increased the General Sales Tax (GST) on cars with 1400cc or larger engines from 18% to 25% as part of their luxury tax to raise more revenue and meet the conditions of the International Monetary Fund (IMF).

The development comes shortly after the Government increased the General Sales Tax (GST) from 17% to 18% on across the board as per IMF demands. The new GST will result in a wave of price hikes across the automotive industry, which is already struggling with the declining economic conditions.

According to the notification, the new 25% General Sales Tax (GST) will be applicable on locally manufactured or assembled SUVs and CUVs, locally manufactured or assembled vehicles having engine capacity of 1400cc and above, and locally manufactured or assembled double cabin (4×4) pick-up vehicles.

Apart from vehicles, the new GST will be applicable on several other items, including electronic items, make-up products, pet food, shoes, imported ladies purses, shampoo, soap, lotion, headphones and speakers, iPod, doors and windows, bath fittings, tiles, sanitary ware, chandeliers, and fancy lights.

The automotive industry is already struggling due to restrictions on the import of Completely Knocked Down (CKD) kits and Honda Atlas Cars Pakistan Limited (HACPL) has shut down its production for the entire month of March.

Read more: Honda Shuts Down Production For The Entire Month.

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