The Federal Board of Revenue has imposed a 25 per cent sales tax on locally manufactured or assembled vehicles if the invoice price exceeded Rs4 million.

In a notification, the FBR said that a 25 per cent sales tax would continue to be applicable on locally manufactured or assembled vehicles having engine capacity of 1400cc and above.

Under the new amendments, 25% GST will be implemented on:

• Locally manufactured or assembled vehicles having engine capacity of 1400cc and above.

• Locally manufactured or assembled vehicles if invoice price (excluding sales tax) exceeds Rs4 million.

• Locally manufactured or assembled double cabin (4x) pick-up vehicles.

The decision comes after the Economic Coordination Committee of the federal cabinet on February 14 approved the higher sales tax rate on locally manufactured or assembled vehicles to generate an additional Rs4 billion in tax revenue.

Twenty-five per cent GST is already on cars with engine capacity of 1400cc and above. The second point of this SRO is important, which means that all the cars above Rs4 million would now have 25% sales tax on them.