4×4 electric motor vehicles allowed duty, tax concessions

4×4 electric motor vehicles allowed duty, tax concessions

ISLAMABAD: The recently promulgated Tax Laws (Amendment) Ordinance, 2021 has granted concessions to 4×4 electric motor vehicles on import of units in both Completely Built Up (CBU) and Completely Knocked Down (CKD) conditions.

The federal cabinet recently allowed duty and tax concessions to 4×4 electric vehicles. Earlier the concession was available to two-wheelers and three-wheelers electric vehicles.

The concessions have been allowed to import of 4×4 electric motor vehicles from customs duty, sales tax and income tax.

(a) Following are the categories of 4 wheelers electric vehicles imported in CBUs for which concessional rates have been allowed.

— 25 percent customs duty allowed on imports under Pakistan Customs Tariff (PCT) 8703.8090. The concession is allowed till June 30, 2026.

— Import of 4×4 electric motor vehicles imported under PCT 8703.8090 with condition that the concession shall be admissible till June 30, 2026 on import of electric vehicles 4 wheelers (CBU) per company of the same variant to be assembled or manufactured to the extent of 100 units per company, duly approved / certified by Engineering Development Board (EDB).

The EBD shall monitor compliance with EV Policy 2020 and intimate FBR immediately in case of violation by any manufacturer to stop further clearance at concessional rates.

Following are the categories of 4 wheelers electric vehicles imported in CKDs and specific parts for which concessional rates have been allowed:

Description of Vehicle & PCTDescription of Imported goodsRate of Customs DutyConditions
Electric Vehicles 4 wheelers (PCT Code 703.8090)(i) EV Specific components for assembly / manufacturer in any kit-form (CKD)1% (notwithstanding the rate of customs duty on these items as specified in the First Schedule to the Customs Act, 1969).The concession shall be admissible to manufacturers of electric vehicles 4-wheelers till 30th June 2026, subject to certification and quota determination by the EDB.
 (ii) Components for assembly / manufacture in any kit-form Non-Localized parts.10%The concession shall be admissible till 30th June 2026 subject to the conditions mentioned in para 2 of the SRO.656(I)/2006 dated June 22, 2006.
 (iii) Components for assembly / manufacture in any kit-form Localized parts.25%The concession shall be admissible till 30th June 2026 subject to the conditions mentioned in para 2 of the SRO.656(I)/2006 dated June 22, 2006.

In addition to the above, concession on import of CBU chargers with CKD kits for electric vehicles have been extended to 4 wheelers which was previously available for 2 and 3 wheelers.

In sales tax, (a) Local manufacturers / assemblers importing and supplying the electric vehicle of prescribed categories have been allowed exemptions and reduce rates of sales tax which have been tabulated below:

Import of CKD kits for the following electric vehicles (4 wheelers) by local manufacturers till June 30, 2026:

(a) Small cars and SUVs with 50 kwh battery or below; and

(b) Light Commercial Vehicles (LCVs) with 150 kwh battery or below

Following locally manufactured or assembled electric vehicles

(4 wheelers) are subject to one percent of sales tax till June 30, 2026:

(a) Small cars and SUVs with 50 kwh battery or below; and

(b) Light Commercial Vehicles (LCVs) with 150 kwh battery or below

Import of CKD, SUVs and LCVs have also been incentivized by excluding from the ambit of Minimum Value Addition (MVAT) at the time of import.

For that purpose, following classes of vehicles have been added in the exclusion section of

12th Schedule to the Sales Tax Act, 1990:

– Electric vehicles (4 wheelers) CKD kits for small cars or SUVs, with 50 kwh battery or below and Light Commercial Vehicles (LCVs) with 150 kwh battery or below till the 30th day of June 2026.

– Electric vehicles (4 wheelers) small cars or SUVs, with 50 kwh battery or below and Light Commercial Vehicles (LCVs) with 150 kwh battery or below in CBU condition till 30th day of June 2026.

– Electric vehicles (2-3 wheelers and heavy commercial vehicles) in CBU condition till the 30th say of June 2025.

FED is levied on locally manufactured / assembled and imported motor cars, SUVs at the rate of 2.5 percent ad Val. However, there were certain exemptions for rikshaws designed for transportation of persons.

Through the Amendment Ordinance, exemption has also been allowed to 4 wheelers electric vehicles (falling under tariff headings 87.03) up to June 30, 2026.

The reduced rate of 1 percent would now be applicable on import of CKD kits of electric vehicles for small cars or SUVs with 50 kwh battery or below and LCVs with 150 kwh battery or below.

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