Budget Impact on Auto Sector

Budget Impact on Auto Sector


FOLLWINGS ARE IMPORTANT MEASURES FOR AUTO SECTOR

A) Federal Excise duty of 5% has been imposed on import as well as locally manufactured
cars with engine capacity above 850cc.

Imposition of 5% FED will increase product price, which will further dampen already dwindling auto demand.


B) Duty rate on import of cars/jeeps above 1800cc has been increased to 100% from
90% earlier.

Auto manufacturers like Indus Motors will loose margins on their imported products because most of which are above 1800cc.

C) Fixed import duty on old and used cars and jeeps has been increased by 10%.

This would protect the local industry through expected increase in the cost of used imported vehicles, thus providing cost advantage to local assemblers.

D) A withholding tax (WHT) of 2.5% on purchase of locally manufactured motor car or A member company of group will increase the car prices, which are already on the high side.

E) Rate of General Sales Tax (GST) on car purchase has been proposed to increase from 15% to 16%.

It will further increase the car prices, which will likely to have a dampen impact on cars sales volume.