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The recent fiscal budget 2024-25 also introduced and increased the tax range on imported used and locally assembled vehicles. Interestingly, agricultural tractors also fall in this segment. Following the imposition of a 10% surge in general sales tax (GST) and an increase in the cost of production, Millat Tractors has also announced a price hike.

In an official notification, the company informed that the prices of MF tractors are being revised for bookings made on and after July 1, 2024.

In the company’s notification, another note read:

“The previous prices shall be applicable on the orders booked with MTL up to 30.6.2024 where-against financial instrument dated 30.6.2024 or earlier, are received in MTL up to 09.7.2024.”

New Regulatory Tax and Its Effects

Other than general sales tax (GST), the revised regulatory duty (RD) has also affected local assemblers and imported used cars to some extent, raising concerns among local car companies.

The government has implemented a new 15% regulatory duty (RD) on imported used vehicles with engine capacities ranging from 1300cc to 1800cc. Above 1800cc, the RD is 70-90%. Meanwhile, there is no regulatory duty on cars under 1300cc. This simply means that popular models like Toyota Aqua, Honda Vezel, and CHR will see a price increase.

However, smaller-engine cars (below 1300cc) like the Daihatsu Mira, Nissan Dayz, and Toyota Vitz are exempt from this RD and will continue with their current fixed taxes. This exemption might benefit these smaller cars but could potentially hurt local manufacturers like Pak Suzuki, which produces vehicles like the Alto (660cc), WagonR (1000cc), Cultus (1000cc), and Swift (1200cc).

The biggest impact will likely be felt on used Hybrid Electric Vehicles (HEVs) exceeding 1300cc. These include models like Honda Vezel, Toyota Yaris Cross, Honda CHR HEV, and Toyota Corolla Cross. Their prices are expected to jump by a significant Rs. 2.5 million to Rs. 3 million, pushing their current market value from Rs. 7.5 million to Rs. 9.5 million.

What do you think about the new tax imposed on vehicles and tractors prices increased recently? Tell us in the comments section.