Tax Restructuring on EVs: What is the Deal?

In a parliamentary session on Monday evening Finance Minister Dr. Prakash Sharan Mahat unveiled the financial budget for the forth coming year.

Addressing a joint session (NA and HoR) of the Federal Parliament yesterday evening, Minister Mahat announced to restructure the existing tax laws with regards to import of electronic vehicles (EVs).

Earlier, EVs of up to 100 KW capacity were obliged to pay 10 per cent custom tax while were exempt from paying any additional taxes. 

The new arrangements has categorized 50-100 KW capacity EVs for 15 per cent custom tax after increasing it by five per cent and adding 10 per cent excise duty. 

Similarly, the excise duty and custom tax (for 100-200 KW capacity) earlier has been deduced by 10 per cent. Earlier, for the 100-200 KW capacity EVs custom tax and excise duty was set at 30 per cent which has now been reduced to 20 per cent each. 

For the electric vehicles of 200-300 KW capacity, a five percent deduction in custom tax from 45 per cent to 40 percent has been set.

Similarly, for EVs of the same capacity, excise duty has been maintained stable at 45 per cent.

Meanwhile, for electronic cars, jeeps and vans of more than 300 KW capacity, 60 per cent custom tax and 60 per cent excise duty has remained stable.