Customs Authorities Confused on How to Tax Fully Electric Cars

Customs authorities are seeking guidance of Federal Board of Revenue (FBR) about giving concessions on duties and taxes for the import of environment-friendly ‘electric vehicles’ (EV), as applicable in case of ‘hybrid electric vehicle’ under SRO 499(1)/2013, dated 12/6/2013.

Sources revealed that FBR is examining the issue in light of practice in field formations and is expected to issue a clarification after completion of the exercise.

The Board has raised a question on whether a complete electric vehicle is entitled for benefit/concession of duties and taxes available to electric hybrid vehicles in terms of SRO 499(I)/2013.

According to a communication from Jamil Nasir Khan (Collector Model Customs Collectorate (Appraisement) Dry port Lahore) to the FBR, facts of the case in brief are that one Mian Ahmad Irfan s/o Muhammad Noorullah imported an ‘electric vehicle’ (EV) of model 2016 bearing chassis # 5YJSB7E21GF137160 under gift scheme and filed GD # 792 dated 24.10.2017 through Sanasu Traders, Customs Clearing Agent.

As per examination report, the imported vehicle is a “used Tesla fully Electric Car S70 Fuel Electrically 193 kw, Model 2016, Duel Motor, 04 Wheel Drive” with standard accessories.

At the time of assessment, the importer contended that the vehicle is entitled to benefit/concession of duty and taxes available to the “hybrid electric vehicle” on the analogy that both types of vehicles are environment-friendly and that the electric vehicle imported by him is far better, from the perspective of environment, compared to fossil fuel vehicles and hybrid electric vehicles.

It generates no pollution and noise. The importer further contended that the vehicle squarely falls under ‘hybrid electric vehicle’ (HEV) in terms of SRO 499(1)/2013 dated 12/6/2013, according to the Collector’s letter.

Since no evidential record/data of such vehicles is available, the importer’s request for a provisional assessment was acceded to.

The said vehicle was assessed under PCT 7803.8090, attracting customs duty 50%, sales tax 17%, withholding tax 9%, and additional customs duty 1%. He further contended that since no cubic capacity of the vehicle is available, therefore federal excise duty @ 10% is also not attracted in this case.

Out of the total amount of duties and taxes of Rs 6,616,113, the differential amount of duty and taxes including FED (Rs. 3,867,811), has been secured in the shape of a pay order. Against this backdrop, the Board’s guidance is solicited on the following specific question,

Is a complete electric vehicle covered under ‘hybrid electric vehicle’ in terms of SRO 499(I)/2013 dated 12/6/2013 and entitled for benefit/concession of duly and taxes available to electric hybrid vehicles?

  • EVs should be completely tax free to give boast and incentive to the people promoting/importing pollution less and noise less full electric vehicles.

  • EVs will further increase the load on our failing power network. People buying Evs should also buy a charging station that uses solar power.

  • EV should be tax equally to that of luxury cars i.e., 250% or whatever is the current figure. The reason is that EV is a very bad choice for countries like Pakistan, which is already challenging huge energy crisis. Imagine, when EV will spread in our country as KIA is already joining Pakistan, they will deliver less expensive cars as a result it will promote nothing rather ‘kunda system’.

  • A complete all electric car falls under 1 CC category so the implementation should be for 1cc only.
    If tax stays same then still consumers have no issue with that.
    So according to the law there should be only 1000 rupees charges on 1 cc or max 2000 rupees. :D

    However, i am sure those haramkhors in custom will bring up something unexpected.
    So a 100,000 dollar tesla model s P100D should cost us 125.000 dollar including shipment to Pakistan and with every single charges. Not more than that.

  • what a country of fools…. Basic Technical Education should be compulsory we are living in world of technology.. should not even use cc as criterion simply use Horse Power HP.. 1 hp = 746 Watt a grade 10 student knows that.. why use cc at the end of day it all matter how much brake horse power an engine delivers? country of fools.. taxed everything.. the next thing they would tax is you piss and you are taxed .. you spit you are taxed…Such a shame..

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