Cabinet committee approves draft amendments to customs law to support EV policy

The Cabinet Committee for Disposal of Legislative Cases (CCLC) has approved draft amendments to the Fifth Schedule of the Customs Act, 1969 to align the concessionary regime with the Automotive Industry Development and Export Policy (AIDEP) 2021–26.

The committee, chaired by the minister for law and justice, endorsed the proposed changes and recommended forwarding the draft bill to the federal cabinet for final approval.

Officials from the Revenue Division told the committee that the government has introduced fiscal incentives in recent years to promote local manufacturing of electric vehicles and support the transition to cleaner transportation.

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

Following that decision, Part-V(A) was added to the Fifth Schedule of the Customs Act through the Finance Act 2020. The provision granted customs duty relief on electric vehicle imports, including completely built units (CBUs), as well as completely knocked down (CKD) kits and EV-specific parts.

The government later approved the Automotive Industry Development and Export Policy 2021–26 in December 2021, which extended duty concessions on EV CBUs, CKD kits and related parts until June 30, 2026.

Officials said the current language of the concessions does not clearly address EV-specific parts and components used in electric light commercial vehicles and vans, which are covered under the AIDEP framework.

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

Budget proposals related to the changes were submitted to the Tariff Policy Board in June 2025 but were not finalised during the budget process due to time constraints.

The issue was later revisited in meetings between the Ministry of Industries and Production, the Federal Board of Revenue and the Tariff Policy Board in September 2025.

The board subsequently advised the ministry, in consultation with the FBR, to proceed with the required legislative amendments.

Officials said the proposed amendments were reviewed by the ministries of industries and production, commerce, finance and law and justice, and the draft bill was vetted by the Law and Justice Division before being placed before the CCLC.

After reviewing 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.