The Federal Board of Revenue (FBR) has proposed 15 percent Federal Excise Duty (FED) on the import of vehicles above 2700cc in the upcoming budget (2016-17). Sources told Business Recorder here on Saturday that the government had imposed 10 percent excise duty on the motor vehicles of cylinder capacity of 1800cc or above.
According to the Finance Bill (2013-14), 10 percent FED was applicable on motor cars, SUVs and other motor vehicles of cylinder capacity of 1800cc or above, in principal designed for the transport of persons (other than those of headings 87.02), including station wagons and racing cars of cylinder capacity of 1800 cc or above.
In budget of 2014-15, the government had withdrawn 10 percent Federal Excise Duty (FED) on locally manufactured motor vehicles exceeding 1800cc. Under the present law, imported vehicles exceeding 1800cc are subjected to 10 percent FED. Budget markers are reviewing the proposal that rate of excise duty may be enhanced to 20 percent on vehicles exceeding 2700cc. Later the proposed rate of 20 percent has been reduced to 15 percent on the import of vehicles above 2700cc, they added. The rationale behind the proposal is to generate additional revenue from those rich people, who can easily afford to purchase imported luxury cars above 2700cc, they added.