Sunday, April 14, 2024

Carmakers delaying price relief despite duty, tax cut

After the Govt’s decision of reducing federal excise duty (FED), general sales tax (GST) & additional customs duty (ACD) on import of accessories and spare parts from 1st of July, automobile manufacturers have been showing very low response on this and slowing down passing on the price cut benefit to the customers.

The government had lowered FED on all automobiles up to 3,000cc by 2.5pc while on vehicles from 660cc to 1,000cc the FED had been reduced. The GST had also been decreased to 12.5pc from 17pc for cars up to 1,000cc. while for 1,001cc to 2,000cc vehicles; the FED was cut down to 2.5pc from 5pc and for 2,001cc to 5pc from 7.5pc.

The owners & their dealers are not ready to clarify why the rates of vehicles still have not reduced, even after six days of issuance of Finance Bill 2021, which issues the date of making budgetary measures on working from July 1.

The taxation actions was intended to give some relief to the customers from July 1, but so far the rates are still standing on the same previous level.

It seems like all the owners and dealers have grouped to suspend the price benefit to the customers. Though, these assemblers in their past practice had been quick in increasing the rates in case of any increase in taxes.

According to the Sources, old auto-players are tarrying in passing on the full effect of GST and FED slice to the customers as they feel that they may have to change costs keeping in view high delivery and cargo charges and rupee debasement against the dollar in the last one a half month back.

A Japanese car assembler said that prices had not been reduced because the company is waiting for the Govt approval as no SRO has been issued yet.

He further said that the SRO would be distributed within 1 or 2 days. “The cabinet approved it on Tuesday and tomorrow is a press conference and we expect the SRO by Thursday,” he added.

He said new bookings of vehicles are started at old prices & the company would reimbursement the balance amount to the consumers at the time of delivery of vehicles.

Sources also said that only one Korean vehicle assembler named ‘Lucky Motor Corporation’ has issued the order to its dealers to make booking of new vehicles at decreased prices after cut in various taxes & duties.

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