Car Dealers Association (CDA) and Auto-Mobiles Brokers Association (AMBA) have strongly protested over the imposition of 15 percent sales tax on the sale and purchase of new and old cars describing it as illogical and unfair.
In their statements here on Thursday, Nadeem Ahmed and Salim Sherwani said that cost of automobiles would be completed if it was sold out six times and total cost would be shifted to national coffers. They further said prices of old and new cars would be increased by 15 to20 percent.
It may be recalled that the Central Board of Revenue (CBR) has imposed 15 percent sales tax on sale/purchase of new and old cars.
In this regard, the CBR has issued an SRO on September 14, 2005 by prescribing special procedure, which will be effective immediately. The SRO would also apply to two wheelers. CBR had issued instructions to the National Bank of Pakistan- the collecting bank of sales tax- through a letter.
The letter said, "Government of Pakistan has imposed sales tax on sale of new and old vehicles and its parts at both import and local manufacturing stages."
It further said: "this has been decided to overcome the deficiencies in system for collection of sales tax at dealer side involving sale of second hand vehicles."
The letter said under the procedure, the sale of used and second hand vehicle, including individual transfer of registration without the involvement of a dealer, had been made liable to the payment of sales tax.
"The tax shall be deposited with NBP prior to transfer of registration of vehicle."
Each manufacturer, importer and dealer of vehicles, if not registered, will fill in registration from the respective sales tax collector for the purpose of deposit of sales tax.
"The provincial vehicle registration authorities will be required to report the sales tax receipts on monthly basis, to the collector of sales tax," the letter added.