Auto assemblers are dragging their feet en passant on the worth cut benefit to the consumers after the government’s decision of slashing federal excise duty (FED), general nuisance tax (GST), and extra customs (ACD) on import of parts and accessories from Dominion Day.
Six days have gone and therefore the assemblers and even their dealers aren’t able to provide a clear picture on why the costs of vehicles haven’t come down after the issuance of Finance Bill 2021 making budgetary measures effective from Dominion Day.
The government had cut ate up all vehicles up to three,000cc by 2.5pc while on vehicles from 660cc to 1,000cc the FED had been abolished. The GST had been a move to 12.5pc from 17pc for cars up to 1,000cc.
For 1,001cc to 2,000cc vehicles, the FED was decreased to 2.5pc from 5pc and for two,001cc to 5pc from 7.5pc.
The government has also cut ACDs on all vehicles from 7 to 2pc and its notification has been issued on June 30, 2021.
The taxation measures had been aimed toward providing some relief to the purchasers from Dominion Day, but thus far the costs are intact to their previous levels.
Almost all the assemblers have ganged up to delay the worth benefit to the consumers linking it to non-release of any SRO or notification on FED and GST after the release of Finance Bill 2021.
However, these assemblers in their past practice had been quick in jacking up prices just in case of any increase in duties and taxes.
A Japanese car assembler, who asked to not be named, said prices had not been cut yet because the company is expecting the govt confirmation as no SRO has been released yet.
He said the SRO would be issued during a day or two. “The cabinet approved it on Tuesday and tomorrow maybe a news conference and that we expect the SRO by Thursday,” he added.
The assembler said the reduction in ACD needs an SRO while FED cut has been made via Finance Bill. Car dealers of the local assemblers also are silent saying that they need been expecting the worth reduction’s letter or notice from the assemblers.
A Japanese dealer said delivery of vehicles for the July period to the purchasers had been placed on hold in absence of any price guideline from the assembler. Delivery of vehicles in July means the purchasers had paid full payment which he had booked the vehicle one to four months back counting on the vehicles.
He said new bookings of vehicles are being made at old prices and therefore the company would refund the balance amount to the purchasers at the time of invoice delivery of vehicles.
Sources said just one Korean vehicle assembler — Lucky Motor Corporation — has asked its dealers to require booking of the latest vehicles at reduced prices after cut in various taxes and duties.
Sources said that old auto players are dilly-dallying en passant on the complete impact of GST and FED move the consumers as they feel that they’ll get to adjust prices keeping in sight high shipping and freight charges and rupee devaluation against the dollar within the last one a half months back.