Budget 2026–27: Higher duty on luxury imported cars proposed

June 12, 2026 (MLN): The federal budget for fiscal year 2026-27 proposes imposition of federal excise duty on imported cars and SUVs with engine capacity above 2,000cc and up to 3,000cc, targeting the luxury vehicle segment as part of the government's revenue measures.

The budget also proposes an increase in the existing duty on vehicles above 3,000cc. The measures form part of a broader effort to raise additional revenue from high-end imported automobiles while moderating demand for luxury vehicles.

The proposed levy will further extend to luxury electric vehicles priced above Rs20 million, bringing high-end EVs within the ambit of the excise regime for the first time.

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