The government has implemented revised taxes on vehicles under the Finance Bill 2023. As per the amended bill, vehicles with engine capacity up to 850cc will be subject to a tax of Rs. 10,000.
Similarly, vehicles ranging from 851cc to 1000cc will face a tax of Rs. 20,000, while those falling within the 1001cc to 1300cc range will incur a tax of Rs. 25,000.
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Details of Govt Increases Taxes on Vehicles of All Engine Capacities
Moreover, vehicles with engine capacities between 1301cc and 1600cc will be subjected to a tax of Rs. 50,000, whereas those within the 1601cc to 1800cc range will face a tax of Rs. 150,000. For vehicles falling in the 1801cc to 2000cc category, the tax amount will be Rs. 200,000.
Furthermore, there will be a tax of 6% on the value of vehicles with engine capacities ranging from 2001cc to 2500cc, 8% on vehicles from 2501cc to 3000cc, and 10% on vehicles with engine capacities exceeding 3000cc.
The amended Finance Bill 2023 states that Customs will evaluate the import value of cars with engine capacity above 2001cc to determine the applicable Customs Duty, Federal Excise Duty (FED), and Sales tax.
These changes in the Finance Bill 2023 aim to establish a revised tax structure for vehicles, ensuring equitable contributions based on engine capacity.
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Furthermore, vehicles with engine capacities above 2001cc, whether Completely Built-up (CBU) or locally assembled, will be subject to the invoice value inclusive of all duties and taxes.
In situations where engine capacity is not a determining factor, and the value of vehicles exceeds Rs. 5 million or more, the tax rate to be collected will be 3% of the import value. This applies to imported vehicles and includes the revised Customs Duty, Federal Excise Duty (FED), and Sales tax. In the case of locally assembled vehicles, the tax rate will be 3% of the invoice value.
These provisions ensure that vehicles falling within the specified criteria contribute their fair share of taxes, taking into account the import value or invoice value, as applicable.