Auto assemblers warn of market distortion after REEV duty decision

KARACHI: A recent ruling by the Customs Classification Committee classifying range-extended electric vehicles (REEVs) as battery electric vehicles (BEVs) has triggered concerns among local auto assemblers, who argue that the decision overlooks key market realities and will lead to distortion.

The committee classified REEVs, essentially series hybrids, under HS Code 8703.8090, the same category as BEVs, on the basis that propulsion is provided solely by an electric motor, with the onboard internal combustion engine (ICE) functioning as a generator.

However, the Pakistan Automotive Manufacturers Association (PAMA) has termed the matter a case of misdeclaration under the Customs Act, 1969, and raised the issue with the Federal Board of Revenue (FBR).

It noted that the importer declared the vehicle under HS Code 8703.8090, attracting a 25 per cent duty under the Fifth Schedule, whereas the exporter at the port of origin in China declared it under HS Code 8703.6023, which carries a 50pc duty.

Seek review of HS code for range-extended electric vehicles

Seek review of HS code for range-extended electric vehicles

According to PAMA, HS 8703.8090 applies to pure electric vehicles, while 8703.6023 covers hybrid vehicles.

The association argues that a vehicle equipped with an internal combustion engine, even if used as a generator, cannot be considered a pure electric vehicle and therefore should not qualify for incentives intended for zero-emission vehicles.

PAMA further said the inclusion of an ICE potentially contravenes the National Electric Vehicle Policy, which restricts incentives to all-battery vehicles operating solely on onboard battery charge without any combustion engine.

The association maintained that the dispute involves both classification and fiscal benefits. It argued that if there was no........

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