The government has decided to collect a 3% advance tax on electric vehicles (E-vehicles) worth Rs. 5 million or more at the time of registration.
Tax on E-vehicles
A tax expert tolds that the Finance Act 2023 does not specify advance tex rates for the registration of electric vehicles (E-vehicles). There is no mention of the tax rate for registering E-vehicles.
Finance Act 2023, on the other hand, stated that the rate would be 3% in cases where engine capacity is not applicable and the vehicle’s value is Rs. 5 million or more.
According to the expert, the FBR should have referred to the E-vehicle registration, but confusion has resulted. Because E-vehicles fall under the category of vehicles with no engine capacity, the tax rate would be 3%, as specified in the Finance Act 2023.
According to Finance Act 2023, the value of motor vehicles (2001cc to 2500cc and above 3000cc) shall be –
- Imported in Pakistan, the import value is increased by customs duty, federal excise duty, and S.T payable at the time of import.
- The invoice value includes all duties and taxes if manufactured or assembled in Pakistan.
- The auction value was inclusive of all duties.
The Finance Act also stated that in cases where engine capacity is not applicable and the vehicle’s value is Rs. 5 million or more, the rate of tex collectible shall be 3% of the import value as increased by customs duty, sales tax, and federal excise duty in the case of imported vehicles or invoice value in the case of locally manufactured or assembled vehicles.
The government has imposed a fixed tex on imported and locally manufactured vehicles with displacements ranging from 2001cc to 3000cc under the Finance Act 2023.
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