Govt Announces To Abolish Taxes And Registration Fee On EVs

The Government has officially announced to abolish the motor vehicle tax and registration fee on the Electric Vehicles EVs as per the decision taken in the cabinet. The government aims to provide cheap EVs to public so that would be able to buy EVs easily.

The government has announced exemption for the two-wheeled and three-wheeled EVs and Heavy Commercial EVs, and is now effective. For the owners of four-wheeled EVs the incentives will be will be announced in the upcoming auto and EV policy.

Following are the incentives to the EV segment in the 2021-22 financial budget.

 The GST on locally assembled and imported hybrid vehicles will be:
 8.5 percent for vehicles up to 1800cc
 12.75 percent on vehicles between 1801cc and 2500cc
 The aforementioned concessions will remain valid until 30 June 2025 for Completely Built-Up CBU units of two-wheeled and three-wheeled EVs and heavy commercial EVs.
 The concessions will remain available until 30 June 2026 for locally assembled 4-wheeled EVs with a battery pack of up to 50 kW and locally assembled commercial vehicles with a battery pack of up to 150 kW.
 Reduction of the General Sales Tax GST rate on locally assembled EVs from 17 percent to one percent in a bid to promote environmentally-friendly vehicles. This is only applicable to passenger vehicles with a battery pack of up to 50 kW and light commercial vehicles with a battery pack of up to 15o kW.
 The Federal Excise Duty FED has never been applicable to EVs, and will remain the same in the current budget.
 Value Added Tax VAT on the import of Completely Knocked Down CKD kits for EVs has been abolished.
 Only one percent tax will be incurred on the import of EV parts for manufacturers.
 The duty on the imports of charging equipment will be one percent.
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