The Federal Government has announced the exemption of registration fee and motor vehicle tax on Electric Vehicles (EVs) in order to incentivize people to make the shift towards EV and promote environmentally friendly vehicles.
However, this exemption in registration and motor vehicle tax for Electric Vehicles (EVs) is only applicable on two-wheelers and three-wheelers along with Heavy Commercial Vehicles (HCV) and four-wheelers.
The Federal Government had previously announced to end tax on the import of Completely Knocked Down (CKD) units for local assembly of electric vehicles (EV).
Meanwhile, the sales tax on locally assembled electric cars will be reduced to 1% from 17%, which is a massive 16% reduction. Furthermore, there will be no Value Added Tax (VAT) on import of electric vehicles and CKD kits.
Federal Excise Duty (FED) on 4-wheeler Electric Vehicles (EV) has also been removed as per the Electric Vehicle Policy introduced in October 2020.
The upcoming Auto and EV Policy will provide more details regarding incentives for four-wheeler Electric Vehicles.