Millat Tractors Announce Price Increase Due to New Taxes

Jawad

18 Jul 2024

281

Millat Tractors Announce Price Increase Due to New Taxes

The fiscal budget for 2024-25 introduced increased taxes on imported used and locally assembled vehicles. Agricultural tractors are also affected by these changes. Following a 10% surge in general sales tax (GST) and increased production costs, Millat Tractors announced a price hike for their products. According to an official notification, the revised prices for MF tractors apply to bookings made on or after July 1, 2024.

Price Adjustment Notifications

Millat Tractors specified in their notification that previous prices would apply to orders booked before June 30, 2024, provided the financial instruments are received by July 9, 2024. This transitional period allows customers to take advantage of the old pricing if their orders are placed and payments are received within the stated timeframe.

New Regulatory Duty Imposed

In addition to the GST increase, the government introduced a new regulatory duty (RD) impacting local assemblers and imported used cars. Imported vehicles with engine capacities between 1300cc and 1800cc are now subject to a 15% RD, while those above 1800cc face an RD of 70-90%. Vehicles under 1300cc remain exempt from this duty, which includes popular models like the Daihatsu Mira, Nissan Dayz, and Toyota Vitz.

Impact on Vehicle Prices

The new RD will likely increase the prices of popular models such as the Toyota Aqua, Honda Vezel, and CHR. However, smaller-engine cars that are exempt from this duty may benefit, potentially impacting local manufacturers like Pak Suzuki. Vehicles produced by Pak Suzuki, including the Alto (660cc), WagonR (1000cc), Cultus (1000cc), and Swift (1200cc), might face market pressure due to these exemptions.

Hybrid Electric Vehicles Affected

Used Hybrid Electric Vehicles (HEVs) with engine capacities exceeding 1300cc are expected to see the most significant price increases. Models like the Honda Vezel, Toyota Yaris Cross, Honda CHR HEV, and Toyota Corolla Cross could see their prices rise by Rs. 2.5 million to Rs. 3 million, elevating their market value to between Rs. 7.5 million and Rs. 9.5 million. These changes reflect the government's efforts to adjust tax policies and their impact on the automotive market.

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