ISLAMABAD – Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial clarified the issue 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 stated that the Ministry of Law would determine whether imported SUVs, including those classified as EVs and HEVs, fall under the 30% FED category.
Speaking to the committee on Wednesday, the FBR chairman explained 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 to all types of double-cabin pickups, regardless of engine type or capacity.
However, the Senate Standing Committee noted discrepancies in the interpretation of the law. It pointed out that Serial No. 55C does not explicitly mention EVs or HEVs in the description of taxable goods. Furthermore, the PCT codes referenced in this provision do not apply to double-cabin EVs or HEVs, raising doubts about the applicability of FED on such vehicles.
To address this ambiguity, the Senate Standing Committee directed the FBR to seek a formal legal opinion from the Ministry of Law. This step aims to resolve the differing interpretations and provide clarity on the chargeability of FED for these categories of vehicles.
The issue has broader implications for Pakistan’s automotive sector, as the government seeks to promote the adoption of EVs and HEVs to reduce environmental impact and fuel dependency. A clear interpretation of the law will help streamline import policies and support the industry’s transition to greener alternatives.
In addition to this discussion, the FBR chairman highlighted staffing updates within customs field formations. He mentioned that 1,642 posts designated for customs recruitment are to be filled based on provincial and regional domicile, underscoring the organization’s focus on enhancing operational capacity.
The resolution of this legal issue will not only provide clarity for importers and manufacturers but also ensure that Pakistan’s taxation policies align with its sustainability goals. The Ministry of Law’s interpretation is eagerly awaited to settle the matter definitively.