The newly formed coalition government recently announced the “toughest” federal budget in history for the fiscal year 2022-23, proposing a 200 percent advance tax on the purchase of new automobiles with engine displacements of more than 1,600cc.
In addition, buyers of expensive electric vehicles will face a 2% advance tax (EVs). However, before being implemented, the budget plans must be approved by the National Assembly.
However, records reveal that a new auto tax is imposed, which strangely did not reach the news. The government has suggested a 2% Capital Value Tax (CVT) on automobiles costing more than Rs 5.0 million.
Expensive automobiles with tiny turbocharged engines will now be taxed. The new tax will be imposed on both taxpayers and non-taxpayers.
The tax will also be paid at the time of the transfer of ownership, according to the document (selling to another owner). The worth of the automobile, on the other hand, will decrease by 10% per year. The CVT will be in effect till the vehicle’s market value exceeds Rs 5 million.
Proton X70, Changan Oshan X7, Peugeot 2008, Chery Tiggo 8 Pro, Honda Civic, DFSK Glory 580 Pro, Haval H6 and Jolion, among others, would be impacted by this tax.
To read our blog on “In April, car sales fell by 18%,” click here.
