Finance Act 2019: FED imposed on all imported vehicles

KARACHI: The government has imposed federal excise duty on all imported vehicles through Finance Act, 2019, which is inline with the levy of excise duty on locally manufactured vehicles.

According to commentary on Finance Act, 2019 by PwC A F Ferguson Chartered Accountants, previously, excise duty was leviable only on imported motor vehicles/SUVs having engine capacity of more than 1799 cc as under:

(i) cylinder capacity of 1,800 cc to 3,000 cc (25 percent ad-val.); and

(ii) cylinder capacity of 3,000 cc or above (30 percent ad val.)

Through Finance Act, 2019, all imported vehicles (except auto rickshaws) have been made subject to levy of excise duty in line with regime applicable to locally manufactured vehicles in the following manner:

Imported motor vehicles of cylinder capacity up to 1,000 cc: 2.5 percent ad valorem

Imported motor vehicles of cylinder capacity of 1,001 cc to 1,799 cc: 5 percent ad valorem

Imported motor vehicles of cylinder capacity of 1,800 cc to 3,000 cc: 25 percent ad valorem

Imported motor vehicles of cylinder capacity exceeding 3,001 cc: 30 percent ad valorem

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