Ferozepur Road is one of Lahore's main commercial arteries, and authorised dealerships for local car assemblers are among its landmarks. A dealership sells new cars on the manufacturer's behalf, books orders with customer advances, handles registration, runs a workshop and a parts counter. Most of the money passing through is the manufacturer's or the government's; the dealer's income is narrower.
Whose money is it?
| Money | Belongs to |
|---|---|
| Car price paid by customer | Mostly manufacturer; dealer's margin is its income |
| Advance income tax at registration | Government — collected for FBR, credited to buyer |
| Registration fees and token | Province — pass-through |
| Insurance premium | Insurer — dealer may earn commission |
| Workshop and parts sales | Dealer's own income |
| Commission from banks for financing | Dealer's income |
Dealers usually earn a commission or margin per car, plus incentives for volume. Record each car's sale with these components separated.
Customer advances and delivery delays
Customers pay booking amounts and full payments in advance, sometimes months before delivery. Those are held for the manufacturer (or are the dealer's customer deposits, depending on the agreement) until delivery. They aren't the dealer's income.
"Own money" premiums
In periods of short supply, cars have sold with "own money" premiums. Premiums received by a dealer or its staff are income. They're also a regulatory matter: manufacturers and authorities have tried to curb them. Any premium received must be in the records.
Advance tax at registration
The buyer pays advance income tax at registration, at rates depending on engine size or value and on filer status. The dealer often collects and deposits it on the customer's behalf. It's the buyer's credit, not the dealer's income.
Workshop and parts
Servicing, repairs, body work and genuine parts are the dealership's own business, with sales tax on parts and possibly PRA on services. Warranty work reimbursed by the manufacturer is income.
Incentives from the manufacturer
Volume bonuses, display support and other incentives are income or reduce cost of sales; record them when earned.
Reconcile each month: cars delivered, payments to manufacturer, margins earned, taxes collected for customers. Dealerships move enormous sums; clear separation is everything.
Used-car trade-ins
Dealerships often accept customers' old cars as part-payment and resell them. Trade-ins are purchases of used cars; their resale is trading income. Keep a register per car, separate from new-car sales.
Ferozepur Road — questions we get asked
Talk to a Lahore tax consultant today
Share your situation on WhatsApp — salary slip, rent agreement, notice, anything — and we tell you what is actually needed.