Pakistan Government Increases Regulatory Duty on 657 Luxury Items
ISLAMABAD: The government imposed or increased regulatory duty on the import of 657 luxury items and notified additional customs duty on the import of 2,200 items with effect from July 1, The News reported Tuesday.
Regulatory Duty and Additional Customs Duty Details
The Federal Board of Revenue (FBR) has implemented a 2% additional customs duty (ADC) on items subject to 0% duty, applicable at rates of 2%, 4%, 6%, and 7% on the import of goods. The regulatory duty ranges from 5% to 55% on hundreds of items. A 7% duty has been imposed on the import of cars, jeeps, and light commercial vehicles in completely knocked down (CKD) condition exceeding 1,000 cc and heavy commercial CKD vehicles.
The FBR issued SRO.928(I)/2024 in supersession of its previous notification to levy regulatory duty on the import of specified goods.
Key Items and Their Duties
- Perfumes and sprays: 20%
- Watches and sunglasses: 30%
- Imported cycles: 10%
- Imported dairy products: 20-25%
- Natural honey: 30%
- Imported dates and other fruit: 25%
- Cosmetics: 55%
- Imported shaving cream and soap: 50%
- Gents and female clothing: 10%
- Imported jewellery: 45%
- Oral or dental hygiene products: 50%
- Cheese and curd: 25%
- Vegetables and mixtures: 50-55%
- Sugar confectionery: 40%
- Tobacco products: 50%
- Dog or cat food: 50%
- Leather clothing and accessories: 50%
- Video game consoles and machines: 50%
Exemptions
The regulatory duty will not be levied on imports under several specific notifications and schemes, including but not limited to:
- Notification No SRO 678
- Chapter 99 of the First Schedule of the Customs Act
- Temporary Importation Scheme
- Fifth Schedule to the Customs Act, 1969
- Special steel round bars and rods by seamless pipes manufacturers
- Rubber aprons and cots
- Vehicles (CBU) by new entrants
- Input materials for manufacturing auto parts by local vendors
Additional Customs Duty on Automotive Components
SRO 929(i)/2024 imposes a 2% additional customs duty on the import of sub-components, components, and sub-assemblies of automotive vehicles, climate control equipment, and batteries for in-house use, OEMs, assemblers, or the open market. These components are used in the manufacturing of agricultural tractors, road tractors for semi-trailers, and fully CNG-dedicated vehicles.
Exemptions from Additional Customs Duty
The additional customs duty does not apply to the import of seeds and spores, motor spirit, high-speed diesel oil, liquefied natural gas, specific polymers, cotton, solar panels, and fertilizer. It also excludes imports under various specific notifications, schemes, and projects, including:
- Chapter 99 of the First Schedule to the Customs Act
- Fifth Schedule to the Customs Act
- Baggage Rules 2006
- Notification No SRO.577(l)/2005
- Notification No SRO.565(l)/2006
- Notification No SRO.693(l)/2006
- Temporary Importation Scheme
- Imports by exploration and production companies for offshore projects
- Import of electric vehicles (2-3 wheelers) till June 30, 2025
- Import of cars, jeeps, and light commercial vehicles in CKD condition up to 1,000cc and CBU condition up to 850cc
Conclusion
The newly imposed or increased regulatory and additional customs duties aim to control the import of luxury items and generate additional revenue for the government. This move is part of broader efforts to manage the country’s economic challenges and fiscal policies.
