Car manufacturers have announced new reduced car prices after reduction in Sales Tax.
With the cut in taxes, a 660 cc car will cost Rs. 85,000 less similarly 1,000 cc car Rs. 110,000, 1300 cc car Rs. 48,000, 1500 cc car Rs. 160,000 and 1800 cc car 115,000.
According to sources, after the reduction, the minimum price of 1,000 cc car will be Rs. 1.53 million while 1300 cc car will cost Rs 1.97 million and 1500 cc car will cost Rs 3.74 million. Minimum price for 1,800 cc cars will be Rs 3.864 million.
Minister for Industries Khusro Bakhtiar said on (July 07) Wednesday that new reduced car prices would be implemented in a few days to reflect the tax and duty cuts on automobiles in the budget for fiscal year 2022.
Addressing a press conference in Islamabad, two day ago, with Information Minister Fawad Chaudhry on aspects of the new auto policy, the federal minister named several cars from different categories and the respective price reduction they would see.
“Implementation of new prices for all these cars will be done in a day or two,” he said, adding that a notification in this regard would be issue soon.
He said this would cause a sudden increase in demand in the automobile sector as well as an increase in car production. “I also want to deliver the good news that as we increase car production then around 300,000 new jobs will be provided in this [automobile] sector this year.”
Bakhtiar said efforts were being made to increase automobile production to 300,000 cars this year and increase their demand through incentives and other measures.
“The biggest incentive for this [automobile] sector was that demand increases when prices are reduced. So the government has removed federal excise duty (FED) and additional customs duty (ACD) on cars along with reduction of sales tax on small cars,” said Bakhtiar.
In the Finance Bill 2021, the government had cut FED on all vehicles up to 3,000cc by 2.5 per cent while abolishing it on vehicles from 660cc to 1,000cc. The general sales tax was also slashed to 12.5pc from 17pc for cars up to 1,000cc.
The government had also reduced ACD on all vehicles from seven to 2pc and a notification in this regard was issued on June 30. These measures were aimed at providing some relief to the customers from July 1, but so far the prices have been intact to their previous levels.
Auto assemblers have been dragging their feet in passing on the price cut benefit to consumers. Almost all the assemblers have ganged up to delay the price benefit to the consumers linking it to the non-release of any statutory regulatory order or any notification on FED and GST after passage of the Finance Bill 2021.
