GST on locally-made 2000cc EVs brought down to 18pc

Business Recorder reported that the government has lowered sales tax on hybrid electric vehicles made in Pakistan with engine capacity up to 2000cc, cutting the rate to 18 percent from 25 percent. The reduced rate applies from September 13, 2026. On Monday, the Finance Division announced the change through S.R.O.1525 (I)/2026, which amends a 2023 notification as later amended in 2024.

The notification takes effect immediately and adds a proviso to the existing sales tax schedule, stating that its Table-II provisions will not apply to these hybrids. Because the change covers only locally made hybrids up to 2000cc, imported models and larger engine categories are not included in the reduced rate.

The notification covers one product category only, so its direct reach is limited to locally made hybrids in the 2000cc segment. Vehicles above that engine capacity remain outside the reduced rate.