FBR Announces New Import Duties Effective July 1, 2024

The Federal Board of Revenue (FBR) of Pakistan has introduced sweeping changes to import duties, slated to take effect from July 1, 2024. Among these revisions, a notable addition is the imposition of a 2 per cent Additional Customs Duty (ACD) on 2,200 previously duty-exempt items, alongside heightened Regulatory Duties (RD) on 657 luxury and non-essential goods.

Under the new directives outlined in SRO 929(I)/2024, the ACD will apply at varying rates—2 per cent, 4 per cent, 6 per cent, and 7 per cent—on items previously enjoying zero per cent duty. Additionally, RDs ranging from 5 per cent to 55 per cent have been levied on a wide array of imported commodities.

Specifically impacting the automotive sector, a 7 per cent ACD will be enforced on cars, jeeps, and light commercial vehicles in Completely Knocked Down (CKD) condition exceeding 1,000 cc, as well as heavy commercial vehicles in CKD condition, under SRO 928(I)/2024, superseding its predecessor SRO 966(I)/2022.

The revised RD structure allocates substantial increases to various categories:

• Perfumes and sprays: 20%
• Watches and sunglasses: 30%
• Imported cycles: 10%
• Dairy products: 20-25%
• Natural honey: 30%
• Imported fruits, including dates: 25%
• Cosmetics: 55%
• Shaving cream and soap: 50%
• Men’s apparel: 10%
• Women’s apparel: 10%
• Jewellery: 45%
• Oral hygiene products: 50%
• Cheese and curd: 25%
• Vegetables: 50-55%
• Sugar confectionery: 40%
• Tobacco products: 50%
• Pet food: 50%
• Leather clothing accessories: 50%
• Video game consoles: 50%

Certain imports, however, remain exempt under various provisions including SRO 678, Chapter 99 of the Customs Act, the Temporary Importation Scheme (SRO 492(I)/2009), and the Fifth Schedule to the Customs Act.

Further nuances include a 5 per cent RD on CKD/SKD kits for unspecified home appliances and a 2 per cent ACD on automotive vehicle sub-components detailed in SRO 929(I)/2024. These measures encompass components and sub-assemblies for automotive vehicles and climate control equipment, including those used in agricultural and road tractors (Prime Movers).

In conclusion, the FBR’s latest regulatory adjustments significantly escalate duties on a diverse spectrum of imports, targeting both luxury items and non-essential goods, while incorporating detailed exemptions and application specifics.