The prime minister has approved a new six-year auto policy, with a proposal to reduce customs duty on electric vehicles priced up to $75,000 from 50 percent to 25 percent.
According to details, a plan has been formulated to further reduce the duty to 15 percent by the fiscal year 2030–31. A proposal has also been made to cut the duty on electric buses from 25 percent to just 1 percent, while a new levy will be imposed on vehicles with larger engines. A 1 percent duty will also apply to vehicles priced between $15,000 and $75,000.
According to the document, a 1 percent sales tax has been proposed for electric trucks and dumpers, while a 6 percent sales tax has been proposed for range-extended vehicles and a 9 percent sales tax for plug-in hybrid vehicles. An Automotive Development Levy will be imposed on vehicles with larger engines, with a 2 percent levy proposed for vehicles with engine capacities ranging from 1,000cc to 2,000cc.
A 10 percent levy will be imposed on vehicles with engine capacities exceeding 2,000cc. The policy proposes a 2 percent levy on trucks and buses, while the levy on vehicles with engine capacities below 1,000cc will remain at zero percent.
A 2 percent levy will be collected on vehicles with engine capacities ranging from 1,000cc to 2,000cc, while a 10 percent levy has been proposed for vehicles exceeding 2,000cc.
The new auto policy is expected to generate more than Rs232 billion in revenue over five years.
