Chairman of the Federal Board of Revenue (FBR), Rashid Mahmood Langrial, addressed the matter of Federal Excise Duty (FED) on imported electric vehicles (EVs) and hybrid electric vehicles (HEVs) during a briefing to the Senate Standing Committee on Finance and Revenue.
He clarified that the Ministry of Law would decide whether imported SUVs, including EVs and HEVs, fall under the 30% FED category.
During the Wednesday session, the FBR chairman elaborated that under Serial No. 55C of Table-1 in the First Schedule of the Federal Excise Act, 2005, imported double-cabin (4×4) pickup vehicles are subject to a 30% FED ad valorem. This provision applies uniformly to all types of double-cabin pickups, regardless of their engine type or capacity.
However, the Senate Standing Committee pointed out inconsistencies in interpreting the law. It observed that Serial No. 55C does not explicitly include EVs or HEVs in the list of taxable goods. Additionally, the PCT codes mentioned in the provision do not pertain to double-cabin EVs or HEVs, creating uncertainty about applying FED to such vehicles.
To resolve this ambiguity, the Senate Standing Committee instructed the FBR to seek a formal legal opinion from the Ministry of Law. This move aims to clarify differing interpretations and ensure a definitive decision on the chargeability of FED for these vehicle categories.
This issue has significant implications for Pakistan’s automotive sector, as the government aims to promote EVs and HEVs to mitigate environmental damage and reduce reliance on fuel imports. A clear legal interpretation will help align import policies with the government’s goals and support the transition to greener transportation alternatives.
Alongside this discussion, the FBR chairman shared updates on staffing within customs field formations. He stated that 1,642 vacant posts for customs recruitment will be filled based on provincial and regional domicile, reflecting the FBR’s commitment to boosting operational efficiency.
Resolving this legal matter will provide clarity for importers and manufacturers and ensure that Pakistan’s tax policies align with its sustainability objectives. The Ministry of Law’s forthcoming interpretation is expected to settle the issue conclusively.
