Expected Price Hike For Local HEVs After New Tax Slab

When the consumers were a waiting for the exemption or at least an ease in taxes imposed on local HEVs, the government, in the new fiscal budget 2024-25, has shattered all the hopes.

As per the “Finance bill 2024”, clause 73 of the 8th schedule, allowing the government to collect 8.5% general sales tax on locally assembled HEVs from “The Sales Tax Act, 1990,” is omitted. Consequently, the move has pushed the CKD HEVs into the general list of vehicles, observing a GST of 25%.

Suffice it to say, the locally assembled hybrid and HEVs including Haval H6 HEV and Jolion HEV, and Corolla Cross are going to witness a price jump. Surprisingly, in budget speech, Finance Minister Muhammad Aurangzeb revealed that the government is going to facilitate the local industry but things are different in disguise.

Estimated Price Jump

Haval Cars:

• As per new general sales tax (GST) slab, Jolion HEV price may increase by Rs. 1,405,000, reaching the new price of Rs. 10.7 million from the current rate of Rs. 9,295,000.
• Meanwhile, Sazgar Engineering’s prominent HEV in the country, Haval H6 HEV is anticipated to observe a jump of Rs. 1,804,506 taking it to the new price tag of Rs. 13,670,000 from previous Rs. 11,866,000.

Corolla Cross:

• The price of the Corolla Cross HEV may rise by Rs. 1,429,000, bringing it to a new price of Rs. 10,828,000 from the current Rs. 9,399,000.
• Similarly, Corolla Cross HEV X in is expected to see an increase of Rs. 1,497,000, resulting in a new price of Rs. 11,346,000 from the previous Rs. 9,849,000.

New With Holding Tax

Same is the situation with withholding tax on new cars, previously based on engine capacity, will now be calculated based on the invoice price of the vehicle (applicable om cars up to 2,000cc).

For Instance, you recently bought a Suzuki Wagon R in Pakistan for Rs. 3.8 million. Under the old registration system, the fee would have been Rs. 20,000. However, with the proposed budget changes, the new registration fee for the same car could be Rs. 38,000, a significant increase.

What do you think about the government’s recent move regarding CKD HEVs? Tell us in the comments section.