The Federal Board of Revenue (FBR) has implemented a significant change in the sales tax structure for locally manufactured or assembled vehicles in Pakistan. The revision, announced through SRO 370(I)/ 2024, modifies the descriptions of locally manufactured or assembled automobile goods, resulting in the imposition of a 25% sales tax.
Contents
Key points regarding the amendment include:
1. Scope of Application:
The 25% sales tax now applies to locally manufactured or assembled vehicles with an engine capacity of 1400cc or more and a price exceeding Rs 4 million (excluding sales tax). This adjustment encompasses double cabin (4×4) pick-up vehicles as well.
2. Amendment of PCT Codes:
The modification extends the PCT code 87.03, previously associated with locally produced or assembled SUVs and CUVs, to vehicles manufactured or assembled locally with an engine capacity of 1400cc and above. Furthermore, vehicles priced above Rs 4 million, excluding sales tax, will fall under this PCT code.
3. Unchanged PCT Code:
The PCT code 87.04, which refers to locally produced or assembled double cabin (4×4) pick-up vehicles, remains unaffected by the amendment.
4. Alignment with Imported Goods:
The FBR has justified this tax adjustment by aligning the sales tax rate with that imposed on certain imported goods, considering their supply or retail price.
This decision by the FBR reflects a significant shift in the taxation structure for locally manufactured or assembled vehicles, aiming to streamline tax rates and maintain consistency across different categories of automobiles.