As per APMA the Association of Pakistani Motorcycle Assemblers, the local motorcycle manufacturers and assemblers have demanded a reduction in GST. GST stands for general sales tax. The government allows the manufacturer to get tax on its behalf from the end consumer and submit it later. The retail price of motorcycles after including tax amount is much higher as compared to the previous prices. That’s why Pakistani motorcycle manufacturers demand a reduction in GST.
Currently, in Pakistan, 18% GST is applicable to automobiles. This means that if a motorcycle is priced at 118,000 rupees its actual value is 1 lac and 18 thousand is tax for the government. Earlier this tax was 17% but the new government increased it to 18% to generate more revenue. The additional GST is deducted by the manufacturer but it belongs to the government.
Sabir Muhammad Sheikh, the chairman of APMA added that by reducing GST, The impact of low prices will be transferred to the end consumer. This will help in making the market situation a bit better. He also said that Govt should add all the new sales dealers for sales tax purposes. This will ensure tax collection and submission in the Govt treasury.
If the Govt reduces the GST on automobiles from 18% to 15%, it will help in reviving the submerging industry. The motorcycle markets are currently stuffed with motorcycles as there are no more consumers. People are going for old used motorcycles and the sales trend of new motorcycles is very less.
The impact of this reduction will add substantial relief. This will create a price relief impact of 10 to 20 thousand rupees on different motorcycles as per their retail prices. GOVT should also focus on developing local industries which can manufacture basic simple automobiles locally. This will help in making and selling affordable motorcycles.