Custom duty on commercial vehicles reduced to 2%
Ibn-e-Ameer
Islamabad: Government has reduced the additional customs duty (ACD) for Vendors and on Heavy Commercial Vehicles in Pakistan.
The Commerce Division briefed the Cabinet that the National Tariff Policy 2019-24 (NTP) stipulated that government would examine all proposals for levy, amendment, or removal of tariffs, at the Tariff Policy Centre.
After approval by the Tariff Policy Board, the commerce division shall submit to the Cabinet or Parliament, as the case may be, for consideration.
Commerce ministry had moved a summary regarding removal/imposition of Additional Customs Duty （ACD) and Regulatory Duty (RD) on different items, including the Auto sector, the Federal Cabinet, inter alia, decided to remove Additional Customs Duty(ACD)on import in CKD condition for cars and light commercial vehicles for 1000cc.
It decided to reduce it for 1001cc and above vehicles, from 7% to 2%.
During the 33rd meeting of the Tariff Policy Board (TPB), the Ministry of Industries ＆ Production informed that due to inadvertent omission, reduction of ACD on imports for vendors under SRO 655 (I)/2006 and on import of Heavy Commercial Vehicles in CKD condition had not been included in the proposals earlier submitted to the TPB by the MoI&P during the budget exercise.
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Resultantly, the government could not reduce ACDs for vendors under SRO 655 （I)/2006 and on import of Heavy Commercial Vehicles in Pakistan in CKD condition which had created tariff anomaly as FBR was charging ACD at different rates for OEMs and Vendors of the Auto Sector.
In order to address the tariff anomaly and to spur localization in the Auto Sector, the TPB had approved a reduction in ACD on import of vendors to 2% from the current 7%.
Similarly, the TPB had also approved the reduction of ACD from 7% to 2% on import of Heavy Commercial Vehicles in CKD condition.
The FBR had also supported the proposal and its Comments.
Subsequently, the Commerce division sought approval of the Federal Cabinet.
The Cabinet considered the summary titled ‘Reduction of Additional Customs Duties for Vendors under SRO 655(1)/2006 and on Heavy Commercial Vehicles in Pakistan’ submitted by the Commerce Division, and approved the proposal.
