The Federal Board of Revenue (FBR) has announced significant changes in customs duties, with a particular focus on luxury imports. Effective July 1, 2024, the FBR has introduced an Additional Duty Customs (ADC) on the import of 2,200 items and increased or imposed Regulatory Duty (RD) on 657 luxury items.
The FBR has imposed a two percent ADC on items that previously had zero percent duty. This additional duty varies, ranging from 2 percent to 7 percent, depending on the specific goods as outlined in SRO 929(I)/2024.
The RD on luxury items has been set between 5 percent and 55 percent, affecting a wide range of products. Notably, a 7 percent ADC will now apply to the import of cars, jeeps, light commercial vehicles in Completely Knocked Down (CKD) condition exceeding 1,000 cc, and heavy commercial vehicles in CKD condition.
Key Changes in Regulatory Duty:
- Perfumes and Sprays: 20 percent RD
- Watches and Sunglasses: 30 percent RD
- Imported Cycles: 10 percent RD
- Imported Dairy Products: 20-25 percent RD
- Natural Honey: 30 percent RD
- Imported Dates and Other Fruits: 25 percent RD
- Cosmetics: 55 percent RD
- Imported Shaving Cream and Soap: 50 percent RD
- Gents Caps, Overcoats, Jackets, Trousers, and Shirts: 10 percent RD
- Female Overcoat, Jackets, Skirts, Trousers: 10 percent RD
- Imported Jewelry: 45 percent RD
- Oral or Dental Hygiene Products: 50 percent RD
- Cheese and Curd: 25 percent RD
- Vegetables and Mixtures of Vegetables: 50-55 percent RD
- Sugar Confectionery (including white chocolate): 40 percent RD
- Tobacco (partly or wholly stemmed/stripped): 50 percent RD
- Dog or Cat Food: 50 percent RD
- Leather Clothing and Accessories: 50 percent RD
- Video Game Consoles and Machines, Table or Parlour Games: 50 percent RD
The FBR’s SRO.928(I)/2024 supersedes the previous SRO 966(l)12022, establishing the new regulatory duties on specified goods.
Certain exemptions have been maintained. For example, the regulatory duty does not apply to imports under SRO 678, Temporary Importation Scheme (SRO 492(l)12009), the Fifth Schedule to the Customs Act, imports of special steel by seamless pipe manufacturers, rubber apron and cots, vehicles by new entrants, and input materials for manufacturing auto parts by local vendors (SRO 655(l)/2006).
For home appliances, the RD on CKD/SKD kits not separately specified in the table is set at five percent. Additionally, a two percent ADC has been imposed on components, sub-components, sub-assemblies, and assemblies (excluding consumables) used in the automotive sector, including agricultural tractors and road tractors for semi-trailers.
Exemptions from Additional Customs Duty Include:
- Seeds and Spores for Sowing
- Motor Spirit
- High-Speed Diesel Oil
- Liquefied Natural Gas
- Polymers of Ethylene and Propylene in Primary Forms
- Cotton
- Solar Panels and Fertilizer
- Plant and Machinery for Manufacturing Goods (Chapters 84 and 85)
- Electric Vehicles (2-3 Wheelers) Until June 30, 2025
- Cars, Jeeps, and Light Commercial Vehicles in CKD Condition up to 1,000cc
- Vehicles in CBU Condition up to 850cc
This comprehensive overhaul aims to regulate luxury imports while exempting essential and industrial imports, balancing economic needs with fiscal policies.
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