The government has reduced taxes on various categories of imported vehicles while increasing customs duties on large and luxury cars.
According to details, the government has introduced a significant increase in customs duties on high-end and luxury vehicle imports through the new Finance Bill in an effort to discourage their import.
Under the new Finance Bill, imported vehicles with engine capacities ranging from 2,000cc to 3,000cc will be subject to an 86 per cent customs duty from July 1.
Furthermore, customs duty on all imported vehicles with engine capacities of 3,001cc or above has been increased to 92 per cent.
The Finance Bill, however, brings good news for middle-income consumers seeking smaller and mid-sized vehicles, as taxes on several categories of imported cars have been reduced.
Under the new measures, customs duty on 850cc vehicles has been reduced from 66 per cent to 42 per cent, while taxes on vehicles ranging from 1,000cc to 1,500cc have been cut from 76 per cent to 52 per cent.
In addition, the duty rate on vehicles above 1,500cc has been reduced to 57 per cent, while duties and taxes on 1,800cc vehicles have been lowered to 74 per cent.
The new auto policy also provides relief by removing any Special Excise Duty on vehicles with engine capacities of up to 1,800cc.
For environmentally friendly electric vehicles (EVs), a new import duty structure has been introduced. According to the Finance Bill, large electric vehicles will be subject to a total customs duty ranging from 30 to 40 per cent.
Imported EVs valued at up to $75,000 will face a 30 per cent customs duty, while expensive and luxury EVs worth more than $110,000 will be subject to a 40 per cent customs duty.
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