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The Government of Nepal has introduced a major overhaul in the taxation system for passenger electric vehicles (EVs), setting a flat 20 percent customs duty while replacing the existing excise duty with a new Clean Infrastructure Investment Fee.

The new provision was announced through the Finance Bill presented on Friday as part of the fiscal year 2083/84 budget framework by Finance Minister Dr. Swarnim Wagle.

Flat 20% Customs Duty on EVs

Under the revised system, importers of electric passenger cars will now pay a uniform 20 percent customs duty based on the CIF value of the vehicle.

CIF (Cost, Insurance, and Freight) refers to the total import valuation including production cost, insurance, and transportation up to the customs point. The government said the flat-rate system is intended to simplify the previous tax structure.

Earlier, EVs were taxed based on battery capacity, with customs duty ranging from 15 percent to 80 percent, along with excise duty ranging from 5 percent to 50 percent, depending on kilowatt power.

Excise Duty Replaced with New Green Fee

The government has fully removed the excise duty on EVs and introduced a Clean Infrastructure Investment Fee, which will be levied on top of the 20 percent customs duty.

According to the Finance Bill, the revenue collected from this fee will be used for developing EV charging infrastructure, battery recycling systems, and other clean mobility facilities.

Slab-Wise Clean Infrastructure Fee

The new fee structure is based on vehicle value:

- EVs priced up to Rs 2 million: 2.5% fee

- EVs priced between Rs 3 million and Rs 4 million: additional 15% fee

- EVs priced between Rs 4 million and Rs 5 million: up to 70% additional fee

- EVs priced above Rs 5 million: up to 110% additional fee

(No separate slab has been defined for EVs priced between Rs 2 million and Rs 3 million in the bill.)

Policy Objective

The government said the new tax structure is designed to streamline EV taxation, promote clean transport infrastructure, and generate dedicated funding for long-term green mobility development.

Officials believe the shift from power-based taxation to value-based customs duty will improve transparency and simplify EV imports, while the new infrastructure fee will ensure targeted investment in Nepal’s expanding electric mobility ecosystem.