On Wednesday, the government announced to provide incentives to local electric vehicles (EVs) under the Auto Industry Development and Export Policy (AIDEP 2021-26). According to recent reports, the government policy intends to promote small automobiles, localization, incentivize launch of new developments in tractors and motorcycles, customer security, and encourage new tech advancements i.e. local electric vehicles and hybrids to target export markets.
Government Reduces the Sales Tax on Local Electric Vehicles to 1%
The draft, issued by the Engineering Development Board of the Ministry of Industries and Production, underlined that custom duty on specific components of the local electric vehicles has been fixed at 1%. Under the policy, sales tax on the import of EVs completely built-up (CBU) was reduced to 10% from 25%; while customs duty on specific parts of electric vehicle motorcycles, three-wheelers, and weighty commercial automobiles was set at 1%.
The auto policy further enabled hybrid manufacturing in policy as sales tax has been lowered to 8.5%. According to the draft, customs duty on specific parts for hybrid EV and plug-in hybrid EV to draw in 4% and 3%, respectively. The board has furthermore decided to ease the sales tax on CBU import of hybrids (15% for above 1,800cc, 0% for 1,800cc, and below).
Vehicles Not Meeting the Safety Standards, Cannot be Imported
In addition to this, the policy draft underlined that imports of automobiles will not be permitted if they do not satisfy safety benchmarks. “No vehicle shall be locally manufactured/imported after June 30, 2022 which is not compliant of shortlisted WP 29 regulations,” the document read.
Source: Geo News