Senate Panel Approves Extended EV Customs Duty Concessions

The Senate Standing Committee on Finance and Revenue has approved the Customs (Amendment) Bill, 2026, introducing amendments intended to operationalise fiscal provisions under the Automotive Industry Development and Export Policy (AIDEP) 2021-26 while extending customs duty concessions applicable to electric vehicles and associated components.

The committee conducted a clause-by-clause review of the proposed amendments to the Customs Act, 1969 before unanimously recommending the legislation for passage by the Senate.

During the proceedings, Ashaad Jawwad, Member Customs (Policy) at the Federal Board of Revenue, informed the committee that the government has proposed extending concessional customs duty treatment on imports of electric vehicle parts and components until June 30, 2026.

According to officials, the proposed extension is intended to support environmentally sustainable transportation initiatives and encourage localisation and domestic manufacturing of electric vehicles within Pakistan.

Jawwad further explained that the federal cabinet had originally approved the EV Policy on June 16, 2020, under which concessional customs duties were granted for a five-year period commencing July 1, 2020 on imports of EV-specific components for electric two-wheelers and three-wheelers, completely built-up electric vehicles imported by manufacturers, and components used in electric heavy commercial vehicles including buses, trucks, and prime movers.

These concessions were subsequently incorporated into Part-V(A) of the Fifth Schedule to the Customs Act through the Finance Act, 2020.

Officials additionally stated that under the Automotive Industry Development and Export Policy 2021-26, approved by the federal cabinet on December 21, 2021, the government further extended existing concessions applicable to electric two-wheelers, three-wheelers, and heavy commercial EVs until June 30, 2026.

The policy framework also broadened concessionary treatment to cover imports of EV-specific parts used in light commercial vehicles and vans on terms comparable to concessions available for other four-wheel vehicle categories.

Under the proposed amendment, concessions available through AIDEP 2021-26 will be formally aligned with the provisions contained in Part-V(A) of the Fifth Schedule to the Customs Act.

The amendment further extends concessional customs duty treatment on imports of completely built electric vehicles until June 30, 2026 for a maximum of 10 units of the same variant intended for local assembly or manufacturing purposes.

For electric two-wheelers and three-wheelers, the concessionary threshold will apply to a maximum of 200 units.

Officials clarified that the concessions will only be available for vehicles approved and certified by the Engineering Development Board under the EV Policy 2020.

The Engineering Development Board will additionally oversee compliance monitoring and will notify the FBR in the event of policy violations, upon which further concessional customs clearances may be suspended.