It is confirmed, the government has imposed 25% GST on cars pricing above Rs. 40 lacs. In a new SRO 370 (I)/2024, Ministry of Finance and Revenue has stated that it is pleased to order the amendments in its notification No. SRO 297(I) 2023, dated March 8, 2023.

Under the new amendments, 25% GST will be  implemented on:

• Locally manufactured or assembled vehicles having engine capacity of 1400cc and above.
• Locally manufactured or assembled vehicles if invoice price (excluding sales tax) exceeds Rs. 4 million.
• Locally manufactured or assembled double cabin (4x) pick-up vehicles.

It is important to mention that 25% GST is already on cars with engine capacity of 1400c and above. The second point of this SRO is important, which means that all the cars above Rs. 40 lacs will now have 25% sales tax on them but there is another point.

The second clause mentions “excluding sales tax” which means the car’s price excluding sales tax. Explaining this point, one of the Suzuki official told PakWheels.com that although some variants of Cultus and Swift priced over Rs. 4 million, but if we exclude sales tax, then only Swift GLX comes into this new tax net. Interesting, isn’t it. Anyways, the picture will get clearer in the next few days as companies will announce revised prices under this new SRO. So, just wait and watch.

The other cars or variants to be precise that could come under this new GST net are Honda City, Toyota Yaris, and Proton Saga but we have to wait for the announcement from these companies.