KARACHI, March 16: The imposition of 17 per cent sales tax will result in immediate increase of Rs90,000-150,000 in the prices of farm tractors of various engine capacities from 50hp to 85hp.

Also an automaker on Wednesday raised prices to pass on the impact of 1.5 per cent increase in federal excise duty (FED) to car buyers.

Senior Executive Director Millat Tractors Limited Sohail Bashir Rana told Dawn from Lahore that besides costly tractors the farmers would have to pay more for fertiliser and pesticides after the withdrawal of 17 per cent sales tax exemption.

He said that most of the tractor buying was being made on cash basis and of total sales the share of tractors having engine capacity of 50-60hp hovers between 60-70 per cent.

He said the sale of tractors may remain depressed for few months as farmers may think twice due to sharp increase in prices.

Total tractor sales (Fiat and Massey Ferguson) during July-February 2010-11 stood at 45,519 units as compared to 45,523 units in the same period last year.

Senior General Manager Marketing Pak Suzuki Motor Company Limited Ashfaq Hussain said that the management remained engaged in working out the impact of FED on car prices and new prices would be announced on Thursday.

He said the impact of FED hike ranges between Rs6,000-16,000 on different models starting from the minimum price of Rs464,000 of Suzuki Mehran to highest Rs1,239,000 of Suzuki Liana.

The maker of Honda cars did not announce any new rate on Wednesday and one of its authorised dealers said that new price would be unveiled on Thursday.

A spokesman of the Indus Motors Corporation (IMC) said the new prices would come into effect from March 15, 2011.

He said the industry was already facing serious threats due to government’s decision of relaxation in age limit for import of used cars.

The revised rates of FED would bring Rs20,000 to Rs25,000 impact on the prices of XLI, GLI and Altis models of Toyota Corolla, Rs10,000 on Cuore variants and Rs20,000-30,000 on Hilux variants.

The IMC said that the industry had been absorbing the ever-increasing input costs for many months but it was difficult to bear the extra burden of FED which had been passed on to the customers.

He said that the local car sales had already been dwindling for past two or more years and now the government decision would have an adverse impact on local car sales.

He clarified that as the FED had been imposed on every sale from March 16, the customers taking delivery of their units from today will have to pay the additional cost even if they booked their vehicles before the decision.

In wake of increase in input costs and depreciation of the rupee against yen, prices of variants of Daihatsu Cuore had been raised by Rs35,000-55,000 while prices of Hilux 4X2 and Hilux 4X4 have been raised by Rs20,000 and Rs25,000 respectively.

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