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Industries Ministry urged  to clarify “EVEE” GST evasion case

Industries Ministry urged to clarify “EVEE” GST evasion case

EVEE electric scooter Sales Tax evasion case


 By Nasir Mahmood 

Ministry of Industries & Production has been asked to take up the matter of ‘EVEE’ GST evasion case with FBR pertaining to imported Electric Scooters as published by ‘National Courier’. The EDB stance says that raising sales tax will jeopardize the government’s efforts to promote electric vehicles.  

Deputy Commissioner Inland Revenue, Corporate Tax Office, Lahore, Hina Mustafa had ordered an automobile importer M/s Fusion Engineering (Private) Limited to pay General Sales Tax amounting to Rs. 40,960,878/- towards willful/deliberately mis-declaring and availing the benefit of reduced rate of tax on import of “EVEE” Electric Scooters and selling in the market through 56 dealers. 

According to Manager (SD-III), Engineering Development Board (EDB), M/s Fusion Engineering (Private) Limited raised the issue before Ministry of Industries & Production that the local EV Scooters/Scooties manufacturers were charging @1% sales tax from customers but FBR have given them notice that 1% sales tax is on sale of electric motorcycles not for Electric Scooters for which they are charging @18% Sales Tax. 

The Manager, Engr. Muhammad Mudassir Iqbal said that EDB has reviewed the request submitted by M/s Fusion Engineering (Private) Limited and principally endorse the request because EV Policy aims to promote both Electric Motorcycles and Scooters/Scooties. Further the Auto Industry Development and Export Policy AIDEP 2021-26 envisaged the incentives for 2/3 Wheelers under Section 3.3.1. 

The Section says that Sales Tax is to be fixed @1% at sales for locally manufactured 2-3 wheelers to be reviewed periodically i.e. once in a year in consultation with stakeholders. And Sales Tax at import stage waived off for electric 2-3 wheelers to be reviewed periodically once in a year in consultation with stakeholders. 

Manager Mudassir Iqbal further mentioned that the policy was designed for Electric Vehicles 2/3-wheelers, which includes electric Scooters/Scooties, as perfect e-vehicles in the two-wheeler category and most of the EV manufacturers who got manufacturing license from the EDB are successful in E-Scooties and E-Scooters. Therefore, raising sales tax will jeopardize the government’s efforts to promote electric vehicles, the Manager EDB concluded. 


-Published in September-2024 Edition of MOBILE WORLD Magazine

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