Late last year, photos of a Pak Suzuki Motor Company (PSMC) generated invoice revealed that the company had been charging 17 percent General Sales Tax (GST) instead of 12.5 percent from its customers.
The revelation caught the attention of and upset several people who demanded that the government take action against the automaker’s negligence. To address the issue, Federal Tax Ombudsman (FTO) Dr. Asif Mehmood Jah announced relief for the disgruntled PSMC customers.
According to a media report, the FTO stated that his department will ensure the enactment of 12.5 percent GST for the Suzuki car buyers. He made this announcement during a meeting on budget proposals of the advisory committee on Monday.
FTO noted that PSMC had been delivering its vehicles late and charging the old GST rate of 17 percent while the new GST rate of 12.5 percent was already in place. He claimed to have requested the government to compensate such customers.
Effects of the Mini-Budget
Earlier this year, the government implemented the mini-budget particularly to dampen auto-sector imports. Its implementation resulted in several tax rate hikes, including GST on cars.
While GST on vehicles with engine displacement up to 850cc was kept at 12.5 percent, it jumped back up to 17 percent for cars with larger engines. This resulted in a meteoric rise in the prices of other top sellers such as Suzuki Cultus, Wagon R, Kia Picanto, and a few others.
The whispers of another price hike are floating about, as the automotive industry copes with the ongoing material shortage, supply-chain crisis, local currency depreciation, and a general economic struggle.