CCLC Approves EV Duty Concession Amendments to Customs Act

The Cabinet Committee for Disposal of Legislative Cases (CCLC) has approved draft amendments to Part-V(A) of the Fifth Schedule of the Customs Act, 1969 in order to harmonise the concessionary duty framework with the Automotive Industry Development and Export Policy 2021–26 (AIDEP).

The committee, chaired by the federal minister for law and justice, endorsed the proposed legislative changes and recommended that the draft bill be forwarded to the federal cabinet for final consideration and approval.

Officials from the Revenue Division informed the committee that the government has introduced various fiscal incentives in recent years to encourage domestic manufacturing of electric vehicles (EVs) and facilitate the country’s transition towards cleaner transportation technologies.

Under this policy direction, the federal cabinet in June 2020 approved customs duty concessions for electric vehicles, including two-wheelers, three-wheelers and commercial vehicles, for a five-year period commencing July 1, 2020.

Following that decision, Part-V(A) was incorporated into the Fifth Schedule of the Customs Act through the Finance Act 2020. The provision allowed customs duty concessions on the import of EVs, including completely built units (CBUs), as well as completely knocked down (CKD) kits and EV-specific components.

Subsequently, the government approved AIDEP 2021–26 in December 2021, extending customs duty concessions for EV CBUs, CKD kits and related components until June 30, 2026.

Officials noted that the existing wording of the concessionary provisions does not clearly cover EV-specific parts and components used in electric light commercial vehicles and vans, which fall within the scope of the AIDEP framework.

The Ministry of Industries and Production highlighted this issue in correspondence with the government and recommended amendments to update the concessionary regime accordingly.

Related budget proposals were submitted to the Tariff Policy Board in June 2025; however, they were not finalised during the budget process due to time limitations.

The matter was later revisited during consultations in September 2025 involving the Ministry of Industries and Production, the Federal Board of Revenue and the Tariff Policy Board.

Following these deliberations, the board advised the ministry, in coordination with the FBR, to proceed with the necessary legislative amendments.

Officials further stated that the proposed amendments were reviewed by the ministries of industries and production, commerce, finance, and law and justice. The draft bill was subsequently vetted by the Law and Justice Division before being presented to the CCLC.

After examining the proposal, the committee approved the draft legislation titled “Amendment in Part-V(A) of Fifth Schedule to the Customs Act, 1969 – Alignment with Automotive Industry Development and Export Policy (AIDEP) 2021–26” and recommended its submission to the federal cabinet for final approval.