FBR Imposes Regulatory Duty on 657 Items from July 1

FBR Imposes Regulatory Duty on 657 Items from July 1

Karachi, June 30, 2024 – The Federal Board of Revenue (FBR) has issued a new list imposing regulatory duties on 657 imported items, effective from July 1, 2024. This action, detailed in SRO 928(I)/2024, supersedes the previous SRO 966(I)/2022 issued on June 30, 2022.

The FBR clarified that the regulatory duty will not apply to several categories of imports, including those under specific notifications and schedules of the Customs Act, 1969. Exemptions include imports under S.R.O. 678 (I)/2004 dated August 7, 2004, Chapter 99 of the First Schedule of the Customs Act, and various serial numbers under the Fifth Schedule of the Customs Act, provided conditions are met.

Additional exemptions cover imports under the Temporary Importation Scheme (S.R.O. 492(I)/2009), special steel round bars and rods by seamless pipe manufacturers, electrical steel sheets, rubber aprons and cots, vehicles by new entrants under the Auto Development Policy, and input materials for auto parts manufacturing by local vendors (S.R.O. 655(I)/2006).

The FBR stated that a 5% regulatory duty will be imposed on CKD/SKD kits of home appliances not specified separately in the table. However, pine nuts (chilgoza) and roughly trimmed marble are exempted from regulatory duties. Additionally, the regulatory duty on ground nuts in shell imported from Afghanistan will be reduced from 20% to 10%.

For vehicles with bulletproofing and other security features, the value for regulatory duty purposes will be determined under S.R.O. 1121(I)/2007, dated November 17, 2007.

This new regulation aims to adjust the import duty framework and will be in effect until June 30, 2025, unless rescinded earlier. The move is part of the government’s broader strategy to manage imports, boost local manufacturing, and enhance revenue.

Key Exemptions and Adjustments:

• Exemptions: The FBR listed several exemptions from the regulatory duty, covering various specific import categories and conditions.

• Special Steel and Electrical Steel Sheets: Import of these materials under specific PCT codes and conditions are exempt from the new regulatory duties.

• Home Appliances CKD/SKD Kits: These will face a 5% regulatory duty.

• Pine Nuts and Marble: Pine nuts and roughly trimmed marble are exempt from regulatory duties.

• Ground Nuts from Afghanistan: The duty on ground nuts in shell from Afghanistan is reduced to 10%.

Implications:

This move by the FBR aims to regulate imports more effectively, encourage local production, and optimize revenue collection. The exemptions provided are designed to support specific sectors and industries that are crucial for Pakistan’s economic stability.

Background:

The issuance of SRO 928(I)/2024 is part of the FBR’s ongoing efforts to streamline import duties and ensure a balanced approach to taxation. By exempting certain critical imports and reducing duties on others, the FBR seeks to maintain economic stability while promoting local industry.

This regulatory adjustment is significant as it impacts a wide range of imported goods, reflecting the government’s strategic priorities in managing trade and revenue. The detailed exemptions and duty adjustments demonstrate a nuanced approach to import regulation, aiming to protect key industries while optimizing fiscal revenues.

The FBR’s new regulatory duty framework will come into full effect on July 1, 2024, marking a significant shift in Pakistan’s import duty landscape and aiming to balance economic growth with fiscal responsibility.