KARACHI: To give a tough time to car importers, local auto assemblers are planning to launch imported brand new hybrid cars in Pakistan sometime this year, said industry sources.
Officials of Indus Motor Company and Honda Atlas confirmed The News their plans to unveil new hybrid cars. They, however, did not disclose the exact date of launch.
If there is anything that makes them apparently sluggish is, what they said, anomalies in the sales tax laws.
In the budget 2013-14, the government announced zero percent sales tax on hybrid cars up to 1,200cc, 50 percent off in duty on hybrid cars between 1,201cc and 1,800cc, and 25 percent duty concession on hybrid cars with horsepower between 1,801 and 2,500cc.
The local auto assemblers said the sales tax anomaly is putting car assemblers at disadvantage compared to commercial importers – who are abusing the used car import policy meant for overseas Pakistanis. Besides, the tax relief announced in the budget is only applicable on the import stage for hybrid vehicles and not on sales.
An industry official said the SRO 499 (1) /2013 provides a tax benefit at the import stage for hybrid electric vehicles (HEVs) and not on retail stage.
Since assemblers will be importing the vehicles and then selling them to an end customer, they will have to collect the prevailing sales tax of 17 percent, whereas a commercial importer will only factor in 8.5 percent sales tax.
Subsequently, a local assembler, who is fully documented, will not be able to gain the government’s announced tax relief to the end customers on imported HEVs. Local auto assemblers have requested to the ministry of finance to rectify this anomaly as soon as possible and ensure a level-playing field for them.
The brand new hybrid vehicles will be provided with complete warranty and after sales support, thereby providing peace of mind for customers, said officials. On the contrary, used car importers do not provide any warranty or after sales support services to the consumers despite enjoying the tax rebate, they added.
Around 90 used hybrid vehicles were imported in July and 218 in August 2013. Last fiscal 2012-13, around 2,800 used Toyota Prius arrived in the country. The official said that the government should take assemblers on board to finalise a policy regarding hybrid vehicles to provide benefits to end users.
The News report by Hina Mahgul Rind