Govt decides to withdraw 10pc duty on 1,700cc and above cars

ISLAMABAD: Succumbing to the pressure of local car manufacturers/assemblers, the government is all set to withdraw its decision of imposing 10pc federal excise duty (FED) on 1,700cc and above cars.

Although the auto sector welcomed the withdrawal of condition on non-filers for the purchase of vehicles and properties, introduced in the earlier supplementary budget, the imposition of FED was surprising for the assemblers/manufacturers, as they feared a decline in the sale of vehicles.

The Senate’s Standing Committee on Industries and Production on Wednesday was informed that the 10pc FED imposed on locally manufactured cars and SUVs, having engine capacity exceeding 1,700cc and above, would be withdrawn.

In his briefing to the Senate body, Advisor to the Prime Minister on Commerce Abdul Razaq Dawood said that the decision of imposing 10pc FED on 17,00cc and above cars was being revisited, as implications of FED on auto sales and its subsequent impact on revenue generation were being discussed. “We learn from experiences,” he added.

Privatisation of PSM

Meanwhile, on another issue, Dawood informed that six investors, three each from China and Russia, have expressed a keen interest to take over Pakistan Steel Mills. “We have told everybody that we are open to all and there will be transparency in all affairs,” he added.

The advisor said that the cabinet would decide about the future of the steel mills whether it would be privatised or revived.

“The government has already placed PSM in the list of entities under the privatisation commission,” the advisor said. “The best way is to introduce structural reforms in PSM even if it is to be privatised.”

Senator Kulsoom Parveen and Senator Sitara Ayaz opposed the idea of privatising PSM, whereas Senator Noman Wazir remarked “bureaucrats cannot operate businesses”.

Dawood criticised the former governments and blamed them for the prevalent crisis at PSM.

“Solid sludge of raw iron, as high as 13 feet, has been accumulated in the furnace, as PSM was shut down abruptly due to stoppage of gas supply by the previous government. There has to be a new system to replace the entire blast furnace,” he said. “Pakistan is broke – we cannot finance the revival and therefore private investment in PSM is imminent.”

He said that the government would separate the PSM land from production unit to cut off the interest of land grabbers.

The advisor further informed the committee that the report of an ‘experts group’ regarding viable solution and the future course of the steel mills would be presented to the Economic Coordination Committee on Monday, April 8th. Dawood said that the experts’ group would also present its report to the Ministry of Industries and Production on Saturday, April 6th.

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]


  1. At last the government has realised the need to privitise white elephant.Better be late rather than never.The mill technology is Russian and they must be prefered. This would also be new begining in the choked relations of the two countries.A more than seventy percent share in the ownership must be offered to them.

  2. Thats a good news but now the govt should also bound the local car manufacture to dcrease the car prices in response to that 10pc duty which is withdrawn……govt should take serious action in this regard..

  3. What a funny decision, this PTi govt is no different then other govts, another relief decision to already rich n further crushing the poors

  4. What of people who have already paid the fed how would it be reversed or refunded? Kindly highlight ..

  5. Poor people comen citizen of Pak had pay all taxes three to four time an a items, but tax revinue said, they didnot acheive the targated point. Its totally cheeting with comen n poor citizen ship, their life become difficult to difficult in this way, so reset the goals of tax system,
    Tax is term that who have more ruch pay more tax, but in pakistan all taxs payed by poor people, revise this trnd and make simple and clear term of taxes, nor so tricy and lenthy code and sections, its to simple every man pay tax on his wealth according his value, so there after no need to Add Gst sales tax ect

  6. Hi

    Is there any update on this? It s just been 7 days back news and still auto manufacturers are charging the amount.
    Someone should ask government to clear the statement Because currently they are charging FED

  7. We are a small dealer in Karachi.Please reverse fed 10% charges on 1700cc and above local manufacturing cars because after 7- march 2019 our cars sales just go dawn day by day. People no booking new cars because your different statement in markets. So please clear this issue and solved this problem because our business is crashed. No one book a new car everyone’s waiting your decision. Please stand our business otherwise we’re shifted other country. Thanks. Prime minister sb

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