ISLAMABAD – The government is considering to withdraw its decision ofimposing 10% federal excise duty (FED) on cars with engine capacitiesexceeding 1,700cc.
The Senate’s Standing Committee on Industries and Production, on Wednesday,was informed that the 10 percent FED imposed on locally manufactured carsand SUVs, having engine capacity exceeding 1,700cc, would be withdrawn soon.
The government had imposed a 10% federal excise duty (FED) on locallymanufactured cars of 1700cc and above in the recent Finance SupplementaryBill 2019.
Succumbing to the constant pressure of local auto manufacturers andassemblers, Advisor to the Prime Minister on Commerce, Abdul Razaq Dawood,whilst briefing the Senate Standing Committee on Industries and Production,said that the decision of imposing FED on locally manufactured vehicles wasbeing revisited.
Committee Chairman Senator Ahmed Khan said he had been informed by thegovernment functionaries that the duty would be withdrawn next week or inthe following one.
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However, the Engineering Development Board mentioned that the auto sectorwas not consulted when this decision was made in the second mini-budget.
It was also highlighted that the sales of cars and SUVs over 1,700 cc woulddecrease due to the imposition of the duty, which could eventually lead toa decline in government revenue. Besides, it was also a violation of AutoPolicy 2016-21.
