Custom Duty Reduced For Import of CKD Kits for Small Cars

The Government of Pakistan has reduced the custom duty for the import of Completely Knocked Down (CKD) kits for the assembly of small cars with 1000cc or smaller engines, which is expected to have a positive effect and reduce the prices of these vehicles as well.

According to the amendment notification, the custom duty for the import of assembly kits of small cars with 1000cc or smaller engines has been reduced from 30% to 15%. Furthermore, the Government has also reduced the custom duty from 25% to 16% for the import of tire tubes.

Moreover, the notification also mentioned a reduction in the custom duty from 32.5% to 30% on import of older car models with engine displacements of 1000cc or smaller capacity. Meanwhile, the notification mentioned that the 15% relief is valid for a period of 3 years and applicable on new model cards certified by Engineering and Development Board (EDB).

Much Needed Relaxation for the Automotive Sector

The State Bank of Pakistan has recently eased some restrictions for the automotive sector, including the import of Completely Knocked Down (CKD) kits from January 2, 2023, which resulted in production shutdowns by car assemblers due to shortage of raw materials.

The relaxation provided by the State Bank of Pakistan (SBP) in terms of imports and the reduction in custom duty for small cars will enable car manufacturers / assemblers to overcome hurdles to their production process and hopefully provide some price cuts as well for smaller cars with engine capacities of 1000cc or less.

Read more: Govt Planning to Phase Out Petrol Bikes With Electric Bikes.

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