Govt doles out Rs30bn GST concession to HEV maker

Yielding to pressure from luxury automakers, the government has withdrawn the proposal to impose a 25 per cent sales tax on hybrid electric vehicles (HEVs) and restored the existing 8.5pc in the Finance Bill 2024, resulting in a loss of a whopping Rs30 billion to the national exchequer on an annualised basis. While wrapping up discussions on the budget 2024-25 in the National Assembly on Tuesday, Finance Minister Muhammad Aurangzeb surprised everyone by announcing that the current reduced sales tax rate would continue to apply to HEVs mentioned in Schedule 8 and Serial No 73. Market experts believe this GST concession will grow to Rs50bn next year as more assemblers gear up to roll out hybrid models.