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Company notifies 6.3% price hike, which translates to Rs304,000, citing higher sales tax on locally assembled vehicles
- Swift variant to cost Rs5.429m after increase of Rs304,000.
- Price hike stems from high sales tax on locally assembled vehicles.
- This is second increase in price by Pak Suzuki in one month.
KARACHI: As Pakistan’s automobile industry continues to struggle amid economic woes such as soaring inflation and dire financial indicators, Pak Suzuki Motor Company (PSMC) has jacked up the prices of its Swift GLX CVT model, The News reported on Tuesday.
With a 6.3% increase, which translates to Rs304,000, the Swift GLX CVT variant will not cost Rs5.429 million to consumers instead of the previous Rs5.125 million.
As per the company, the hike in price stems from higher sales tax imposed by the government on locally assembled vehicles which was increased from 18 to 25% for vehicles with an invoice price (excluding sales tax) exceeding Rs4 million on March 8, the date on which the new price will be effective from.
This is the second price hike for the said variant in one month as the company, on March 1, had increased the price of Swift GLX CVT by Rs85,000 — along with other vehicles — due to inflation, higher overhead costs, and rising international raw material and freight charges.
It is to be noted that the Economic Coordination Committee (ECC) and the federal cabinet, during the tenure of the former caretaker government, had granted approval for slapping 25% general sales tax (GST) on all vehicles manufactured locally with prices above Rs4 million or above 1400cc engine capacity or double cabin.
The decision was lamented by Pakistan auto manufacturers who urged the government to scrap the increased sales tax, saying that it would only affect the domestic car makers and not the importers of used cars.
The FBR has estimated to collect Rs4 to Rs4.5 billion through these taxation measures annually.
The ECC had approved the summary of FBR under which all vehicles above 1400cc were imposed 25% GST. But, the FBR added another condition that all vehicles above 1400cc having a price over Rs4 million would have to pay 25% GST.
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