According to top government officials, the government is considering eliminating the 7% Additional Customs Duty (ACD) on the auto sector in the next federal budget (2021-22).
According to high-level officials, the Ministry of Factories and Development and the Federal Board of Revenue’s (FBR) tax authorities will work together to finalise the plan for the abolition of the ACD on the import of spare parts used in local vehicle assembly.
The car industry is currently required to pay a 7% ACD on spare parts imports. The ACD could be abolished as part of vendor incentives to promote the production of vehicle spare parts in the region.
According to the notification, the additional customs duty on electric vehicles 2-3 wheelers (CBU) falling under Pakistan Customs Tariff (PCT) codes 8703.8030 (electric auto rickshaw), 8711.6040 (electric motorcycle), and 8711.6060 (electric motorcycle) will not be applicable until June 30, 2025.