EV sales tax removal proposed

Commerce ministry also recommends lifting cap on batteries for electric cars

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ISLAMABAD:

The Ministry of Commerce has recommended the removal of cap on electric vehicle (EV) batteries for cars, vans and sports utility vehicles (SUVs), as well as elimination of 25% sales tax on EVs.

The issue was taken up in a recent meeting of the steering committee focused on policies for EVs.

During the meeting, the additional secretary of the Ministry of Commerce recommended the scrapping of cap on EV batteries for cars, vans and SUVs and the withdrawal of 25% sales tax on EVs valuing at above Rs4 million.

The secretary of the Ministry of Industries and Production (MoIP) directed the Engineering Development Board (EDB) and the New Energy Vehicle (NEV) Policy team to consider those proposals. Standards for EVs were suggested to be devised by Pakistan Standards and Quality Control Authority (PSQCA) in collaboration with EDB, with a focus on value addition to encourage local manufacturing.

General manager of the National Highway Authority (NHA) informed the huddle that 40 charging station locations had been identified along motorways and national highways at intervals of 120 km from Karachi to Peshawar.

NHA is prepared to instruct oil marketing companies (OMCs) to install EV charging stations, as mandated in their agreements. However, NHA awaits the approval of NEV Policy before proceeding.

The MoIP secretary requested NHA to expedite instructions to OMCs for installing these stations without delay. NHA had been directed to ensure the installation of 40 charging stations by January 15.

The MoIP additional secretary-II gave a presentation on the demand incentive scheme, reviewed the draft NEV Policy 2025-30 and shared stakeholder feedback.

The scheme included distributing 120 e-bikes free of cost to high-performing Higher Secondary School certificate-holding students from public colleges across ICT, Gilgit-Baltistan, AJK, Balochistan, Punjab, Khyber-Pakhtunkhwa and Sindh. Allocations were adjusted to ensure representation for all regions. The Petroleum Division highlighted the demand from OMCs for the announcement of National Energy Efficiency and Conservation Authority (NEECA) regulations and NEV Policy.

The Punjab Information Technology Board (PITB) presented a framework for incentivising EV adoption, including platform development and user authentication processes.

Member planning of the Capital Development Authority (CDA) delivered a detailed presentation on CDA's "Regulations for Installation of EV Charging Stations at Existing and New Fuel Stations." He highlighted that the regulations had been approved, in principle, by the CDA board, subject to approval of the national EV policy.

According to these regulations, it will be mandatory to install at least one charging station at existing petrol pumps and two charging stations at new fuel stations. In Islamabad, roads will soon see 40 EV buses. Petrol pump owners and other stakeholders are already engaged, and several charging stations are expected to become operational within a few days.

NEECA managing director said that regulations for EV charging stations had been approved by the board and would be notified once electricity tariff was finalised. He suggested that electricity tariffs should not be explicitly mentioned in the policy and emphasised aligning CDA regulations with NEECA regulations. The chair endorsed CDA's initiatives and advised NEECA and CDA to collaborate to resolve outstanding issues.

The MoIP secretary stated that CDA's initiative supported the government's efforts to accelerate EV adoption in Islamabad as a model city. The additional secretary-II suggested amending building bylaws to include provisions for charging stations in residential, commercial buildings, and public spaces. Provincial governments were also encouraged to adopt similar bylaw amendments. NEECA MD noted that regulations for installing charging stations in those locations were already in place and they should be shared with ICT and provincial governments.

It was decided during the meeting that NEECA would collaborate with relevant departments and provinces to align regulations for EV charging stations nationwide.

The Power Division will address electricity-related issues with OMCs and develop an implementation plan for dedicated power lines to ensure uninterrupted power supply for charging stations.

NHA will continue developing 40 charging stations along motorways and highways with stakeholder coordination.

The committee finalised two lists for distributing free e-bikes to top-performing students. These lists, under Table-I and Table-II, include distribution options and will be submitted to the prime minister for approval.