Tag: regulatory duty

Updated rates of regulatory duty on import of motor vehicles into Pakistan

The Federal Board of Revenue (FBR) has issued latest rates of regulatory duty applicable on import of motor vehicles into Pakistan. The rates are applicable from July 01, 2021.

In order to apply the rates of the regulatory duty the FBR issued SRO 840(I)/2021 dated June 30, 2021.

Following are the rates of regulatory duty on motor vehicles, along with HS Code, description and rate of regulatory duty:

8703.2193 New 4×4 vehicles in completely built unit (CBU): 15 per cent

8703.2195 New Mini vans (CBU): 15 per cent

8703.2199 Other (New): 15 per cent

8703.2220 New Vehicles of a cylinder capacity exceeding 1000cc but not exceeding 1300cc: 15 per cent

8703.2240 New Mini vans (CBU): 15 per cent

8703.2260 New Sport utility vehicles: 15 per cent

8703.2290 Other (New): 15 per cent

8703.2313 New Sport utility vehicles: 15 per cent

8703.2319 Other (New): 15 per cent

8703.2323 New Sport utility vehicles (SUVs 4×4): 90 per cent

8703.2323 Old and used sport utility vehicles 1801cc to 3000cc: 70 per cent

8703.2329 Other (New): 90 per cent

8703.2329 Old and used cars and Jeeps 1801 cc to 3000cc: 70 per cent

8703.2490 Other (New): 90 per cent

8703.2490 Old and used cars and jeeps above 3000 cc: 70 per cent

8703.3129 Other (New): 15 per cent

8703.3139 Other (New): 15 per cent

8703.3219 Other (New): 15 per cent

8703.3223 New Sport utility vehicles (SUVs 4×4): 90 per cent

8703.3223 Old and used sport utility vehicles above 2000cc: 70 per cent

8703.3225 New All-terrain vehicles (4×4): 90 per cent

8703.3225 Old and used All terrain vehicles (CBU): 70 per cent

8703.3229 Other (New): 90 per cent

8703.3229 Old and used cars and jeeps above 2000 cc: 70 per cent.

July 9, 2021
Regulatory duty on exports reduced

KARACHI: The Federal Board of Revenue (FBR) has slashed regulatory duty up to half on export of goods.

The FBR issued SRO 843(I)/2021 dated June 30, 2021 to amend the SRO 645(I)/2018 dated May 24, 2018, which is related to regulatory duty on export of goods.

According to the latest SRO the regulatory duty on export of hides and skins has been reduced to 10 per cent from 20 per cent.

Similarly, the regulatory duty on export of molasses has been reduced to 10 per cent from 15 per cent.

July 7, 2021

New rates of regulatory duty on imported smart phones

ISLAMABAD: Federal Board of Revenue (FBR) has notified new rates of regulatory duty to be imposed on imported mobile phones during.

The FBR issued SRO 840(I)/2021 dated June 30, 2021 to notify regulatory duty on 599 tariff lines.

Following are the rates of regulatory duty on mobile phone with effect from July 01, 2021:

HS Code	Description	Regulatory Duty
8517.1219	Other having C&F Value up to US$ 30 per set excluding Smart Phones	Rs.300/set
8517.1219	Other (having C&F Value above US$ 30 per set but not exceeding US$ 100 per set, including Smart Phones having C&F value up to US$ 30 per set)	Rs.3,000/set
8517.1219	Other (having C&F Value above US$ 100 per set but not exceeding US$ 200 per set)	Rs.7,500/set
8517.1219	Other (having C&F Value above US$ 200 per set but not exceeding US$ 350 per set)	Rs.11,000/set
8517.1219	Other (having C&F Value above US$ 350 per set but not exceeding US$ 500 per set)	Rs.15,000/set
8517.1219	Other (having C&F Value above US$ 500 per set)	Rs.22,000/set

July 3, 2021

Budget 2021/2022: Duty, taxes abolished on cars up to 850cc

ISLAMABAD: The government has announced abolishing duty and taxes on locally manufactured and imported cars with engine capacity up to 850cc to enable low earning families to afford motor vehicles.

Finance Minister Shaukat Tarin while presenting federal #budget 2021/2022 on Friday announced duty and tax incentives for sale and import of motor cars with engine capacity up to 850cc.

The finance minister made following announcement:

Withdrawal of FED and Reduction in Sales Tax on Locally Manufactured cars up to 850 cc: Rising prices of locally manufactured small cars is a major concern for low earning families. Accordingly, it is proposed that small cars upto 850 cc capacity may be exempted from levy of FE besides reducing Sales Tax rate from 17% to 12.5% and withdrawing value added tax.

Exemption from Withholding Tax on Import: It is proposed that no tax may be collected on imports of books, journals, agriculture equipment and motor vehicles in CBU condition upto 850 cc.

To incentives this sector further additional custom duty and regulatory duty on CBU import of vehicles upto 850cc are being exempted.

Whereas relief to existing manufacturing industry and new models is also being provided by removing Additional Customs Duty (ACD) and rationalizing the tariff structure.

Due to these targeted interventions the middle class of this country will be able to afford a car of this specific category and will accrue the benefits of governments flagship projects of “Meri Gari Scheme” which will enable many countrymen who wish to graduate from motorcycle to own their car by providing small car at an affordable price.

Moreover further incentives in the form of reduction of customs duties are also being provided to electric vehicles for one year to promote the culture of electric vehicle in Pakistan.

Similarly, keeping in view the changing international motorcycles trend usage of local manufacturing of heavy motorcycles and specific categories of trucks and tractors are also being incentivised by rationalizing the tariff structure.

Tax Incentives for promoting electric vehicles: To address environmental issues, reduce reliance on gasoline and provide cheaper source of transportation to public, Government of Pakistan is encouraging the manufacture and use of electric vehicles.

For this purpose, various tax exemptions and concessions are being proposed, which include tax exemption on import of CKD kits for local manufacturing of electric vehicles, reduction in sales tax rate on locally manufactured electric vehicles from 17% to 1%, withdrawal ofvalue addition tax on import of electric vehicles and CKD kits and withdrawal of federal excise duty on 4-wheelers electric vehicles.

June 11, 2021
FBR attributes export growth to incentives, facilitation

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that the significant growth in export was mainly due to integrated strategy for duty and tax incentives and other facilitation.

The FBR has devised an Integrated Strategy which has amply contributed to significant increase in exports of Pakistan from $1.6 billion (in August, 2020) to $2.4 billion (in December, 2020).

Growth in exports of Pakistan in December, 2020 is up by 18.3 per cent as compared to $1.993 billion in the corresponding month last year.

While mentioning factors that have facilitated growth in exports, FBR has stated that Import duties on 1,623 tariff lines, pertaining to basic raw material and intermediate goods were reduced to zero through the Finance Act, 2020.

In pursuance of this strategy, additional customs duties and regulatory duties on 164 items related to textile sector, not manufactured in the country, were also removed in collaboration with all the stakeholders.

All these measures were undertaken with the objectives of neutralizing adverse impact of COVID 19 Pandemic, especially for the exporters, and to make their products competitive vis-à-vis those of their competitors in the international market.

Under the initiative of “Make in Pakistan”, the Duty Drawback rates for at least eight (08) sectors were revised upwards by FBR. During the whole exercise, more than 434,000 claims were disposed of and approximately 7800 exporters have benefited from this Initiative.

Similarly, FBR has paid ninety (90) percent more refunds of Sales Tax during July-December, 2020 as compared to the corresponding period last year.

This led to significant rise in volumes of exports in the form of increase in TEUs (i.e. Tonnage Equivalent Units) / Containers from 35,477 in July, 2020 to 62,591 in December, 2020, showing a growth of 43 percent.

In order to tangibly contribute to exports, all the Export Facilitation Schemes were simplified / rationalized for their optimal use by the exporters.

First of all, extension in utilization period of different export facilitation schemes was allowed for a period of one year from 01st March, 2020 to 28th February, 2021.

Secondly, retention period for plant and machinery, under the Export Oriented Units Scheme, was reduced from 10 years to five years.

Thirdly, for the prompt redressal of grievances, one administrative tier is reduced (under Duty and Taxes Remission for Export Scheme and Manufacturing Bond Scheme) and Regulatory Authority is created to facilitate the exporters.

Moreover, the investors in Export Processing Zones have been facilitated in payment of duties/taxes on the disposal of machinery in the tariff area.

These facilitation measures have led to increase in number of exports Goods Declarations (GDs) from 71,190 in July, 2020 to 79,756 in December, 2020, posting an increase of 11 percent.

In the same vein, total number of Exports Goods Declarations (GDs) (from 1st July, 2020 to 31st December, 2020), remained at 408,472 vis-à-vis 333,943 during 1^st January, 2020, showing an increase of 18 percent.

To realize the objective of facilitation / promotion of exports, an automated system of filing the claim to the final sanctioning of Duty Drawback Claims for the payment of Duty Drawback Claims to the exporter was rolled out on 1st October, 2020. As a matter of fact, export Goods Declaration filed in Customs WeBOC system is being considered as the Duty Drawback Claim. State Bank of Pakistan credits the system sanctioned payments in the accounts of exporters online directly.

In addition to the said automation initiative, Green Channel clearances of the exports GDs / Consignments were increased from 74 percent in July, 2020 to 77.3 percent in December, 2020.

Similarly, for speedy payment of Sales Tax refunds to exporters, FASTER PLUS System has been implemented.

FBR has also removed regulatory duty on import of cotton yarn, till 30^th June, 2021, which is a basic raw material for the value-added textile industry of Pakistan.

Being committed to the national goal of increase in exports, Federal Board of Revenue is making all out efforts to assist exporters by continuously making improvements in its laws and procedures.

January 13, 2021
Association hails decision to probe high car prices

KARACHI: Pakistan Association of Automotive Parts & Accessories Manufacturers (PAAPAM) has welcomed the decision of the government for probing higher automobile prices in the country.

The high prices are mainly due to lower content of localized parts and government’s strict tariff and taxation policy.

In a meeting held on Saturday, the senior PAAPAM members endorsed the Federal Cabinet direction to launch inquiry in this regard, saying the rates of vehicles can be reduced through full implementation of localization regime.

The imposition of regulatory duty, additional customs duty, devaluation of rupee and higher federal excise duty are major burden on the consumers of cars, they added.

“As the existing Auto Policy is to expire by the midyear, right away triggering preparations for AIDP 2021-26, it is right time to give a complete shake up to the stagnant system regulating the Automotive regime, to bring transparency and credibility to the procedures,” they demanded.

The participants of the meeting observed that Prime Minister Imran Khan has rightly pinpointed the issue, because the country is being exploited as a consumer country instead of manufacturing country. We need to “Make in Pakistan” not “Assemble in Pakistan”, they stressed.

PAAPAM fears that in absence of a transparent import regulatory system for automotive parts economic situation will have a further dip with New Entrants, coming into field and launch of Electric Vehicles (EVs) being on the doorstep.

The participants of the meeting said that the entire industry is dependent upon unregulated imports resulting in higher car prices.

They lamented that in spite of having exclusive Pakistan’s domestic market for over three decades the country has failed to achieve anticipated localization targets, leading enormous foreign exchange outflows in exchange of costly parts’ import, having no check at all.

“It’s the time to deeply analyze the root cause of high prices of cars in the country and devise a long-term strategy to timely produce the vehicles in line with demand, besides devising and implementing 10-year ‘Auto parts localization policy’ (APLP) to ensure the localization of all value-added parts.”

They said that it would result in cost reduction, reduction in lead time parts availability to assemblers and vehicle availability to consumers.

Moreover, these measures will create technology awareness, generating skilled jobs for local youth, reducing revenue loss to the government exchequers, besides forcing the OEMs to invest in inspection & testing labs to reduce lead time for approval of locally developed auto parts.

They said that the trio-government regulators in the automotive Sector namely EDB (Engineering Development Board)/MOI&P, MOC and FBR have yet to devise a transparent and coherent system for regulating imports of CKD Kits for lot many variants of vehicles locally assembled.

They said that the EDB, with its meager resources may not singularly handle the gigantic task of classifying Automotive Parts import, directly affecting vehicle prices, promoting the local industry and watching financial interests for national exchequer.

January 2, 2021
FBR withdraws regulatory duty on cotton import

The Federal Board of Revenue (FBR) has taken a significant step to boost the textile industry by withdrawing the five percent regulatory duty on the import of cotton yarn.
(more…)

December 23, 2020
ECC withdraws regulatory duty on cotton yarn import

ISLAMABAD: The Economic Coordination Committee (ECC) on Wednesday approval removal of 5 percent regulatory duty on import of cotton yarn.

The Ministry of Commerce presented a proposal before the ECC regarding removal of 5 percent regulatory duty on import of cotton yarn till June 30, 2021. After detailed discussion, the chair approved the removal of regulatory duty on import of cotton yarn to enhance value-added exports.

Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh chaired the meeting of the ECC of the Cabinet in Islamabad.

Minister for Planning, Development and Special Initiatives Asad Umar, Minister for Production and Industries Hammad Azhar, Minister for Privatization Muhammad Mian Soomro, Adviser to the PM on Commerce Abdul Razak Dawood, Minister for Power Omar Ayub Khan, Minister for Maritime Affairs Syed Ali Haider Zaidi, SAPM on Petroleum Nadeem Babar, SAPM on Revenue Dr. Waqar Masood and Adviser to the PM on Institutional Reforms and Austerity Ishrat Hussain also participated in the meeting. Governor State Bank of Pakistan Dr. Reza Baqir joined the meeting through video link.

The Ministry of Commerce submitted another summary to re-consider the earlier decision taken by ECC dated October 19, 2020 regarding procedure for registration under concessionary regime of electricity, RLNG and Gas in export oriented sectors (erstwhile zero-rated sectors). After due deliberation, the chair directed to maintain status quo with a condition that FBR may register new manufacturers or exporters in five export oriented sectors (erstwhile five zero-rated sectors) in coordination with the Ministry of Commerce till June, 2021.

Communication Division requested ECC for conversion of National Highways Authority loans into Government Grant or grant a waive-off for a much needed fiscal space. A detailed presentation was made before the forum to remodel NHA as a self-sustaining and performance based organization. ECC directed to constitute a sub-committee under the Chairmanship of Minister for Planning, Development and Special Initiatives and would include SAPM Nadeem Babar, Minister for Maritime Affairs Ali Zaidi, Secretary Finance and Secretary Communications to prepare a holistic proposal suggesting revenue generation roadmap for NHA within a month.

NHA was also granted a one-month moratorium to work out details and present recommendations regarding financial viability of NHA before the forum.

The ECC recommended a summary presented by the Industries and Production Division to approve release of funds to PSM for payment in lieu of gas supply to SSGC through a Technical Supplementary Grant (TSG).

ECC approved allocation of upto 9.5 MMCFD gas from M/s PPL’s Benari X-I discovery to SSGCL. Similarly, allocation of 10 MMCFD gas from PPL’s Hadaf X-I to SSGCL was also approved during the meeting. Federal Minister for Maritime Affairs raised the matter of priority berthing for wheat and sugar.

The ECC directed the Logistics Committee to ensure berthing of wheat and sugar vessels on priority, keeping in view, that other imports are not affected.

The ECC also accorded approval for allocation of additional funds for maintenance of Islamabad High Court Building and Judges Residences through TSG as requested by the Ministry of Housing and Works.

The agenda item on Karachi Transformation Plan, presented by the Ministry of Planning, Development and Special Initiatives was deferred to the next ECC meeting for a detailed discussion.

December 2, 2020
Duty exempted on import of medical equipments for prevention, treatment of COVID

ISLAMABAD: Federal Board of Revenue (FBR) on Monday exempted customs duty, regulatory duty and additional customs duty on import of medical instruments and equipments for prevention and treatment of COVID pandemic.

The FBR issued SRO 1251(I)/2020 dated November 23, 2020 to exempt whole of customs duty, regulatory duty and additional customs duty on import of around 61 items. The exemption has been granted on import of such goods with effect from October 04, 2020 to June 30, 2021.

Following goods are exempted from customs duty, regulatory duty and additional customs duty:

01. Real-time PCR system (standard 96-well plate and 0.2ml tubes format, 5 channel)

02. Biosafety cabinet

03. Auto Clave 50 liter capacity

04. Multi channel pipette (0.5 – 10 ul)

05. Single channel pipette

06. Multi channel pipette 20-200 ml

07. Vacuum fold

08. Micro Centrifuge (Non-refrigerated, Rotor capacity 12X 1.5/2.0ml vessles, 2XPCR strip, Max. Speed: 12, 100 x g (13,400 rpm)

09. PCR cabinet (HEPA filter system, UV and white light)

10. Real-time PCR kit for the detection of Coronavirus (SARS-CoV-2)

11. Viral RNA Extraction Kit and machine (Automatic Extractor)

12. VTM (Viral Transport Medium)

13. Dr Oligo Synthesizer

14. Refrigrator/freezer (-20C)

15. Vortex Machine

16. Refrigerated Centrifuge Machine (Rotor capacity 1.5ml x 24, max. speed 14000 rpm)

17. UPS (6 KVA)

18. Tyvek Suits

19. N-95

20. Biohazard bags (18 liters)

21. PAPR (Powdered Air Purifying respirators)

22. Multimode ventilator with air compressor

23. Vital sign monitor with 21BP and ETco2 two Temp.

24. ICU motorized patient bed with side cabinet and over bed table

25. Syringe infusion pump

26. Infusion pump

27. Electric suction machine

28. Defibrillator

29. X-Ray Mobile Machine

30. Simple Nebulizer

31. Ultrasound machine

32. Noninvasive BIPAP

33. ECG Machine

34. Pulse Oximeters

35. Ripple Mattress

36. Blood gas analyzer

37. AMBU Bag

38. Nitrile Gloves

39. Latex Gloves

40. Goggles

41. Face Shields

42. Gum Boots

43. Mackintosh bed sheets

44. Surgical Masks

45. Air Ways

46. Diaflow

47. Disposable Nebulizer Mask Kit

48. ECG Electrodes

49. ETT Tube (Endotracheal Tubes) All sizes

50. Humidifier Disposable Flexible

51. IV Cannula all sizes

52. IV Chambers

53. Oxygen Recovery Kit

54. Padded Sheets

55. Stomach Tube

56. Stylet for Endotracheal Tube

57. Suction Tube control valve

58. Tracheostomy Tube 7, 7.5, 8

59. Ventilator Circuit

60. Ventury Masks

61. Disposable shoes over (water proof)

November 23, 2020
FBR abolishes regulatory duty, ACD on various imported goods

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday abolished regulatory duty and additional customs duty on various raw materials used by textile industry.

The FBR issued SRO 1043(I)/2020 dated October 13, 2020 abolished regulatory duty of 8 percent on various chemicals used as raw material for textile industry.

Besides, regulatory duty imposed at two percent on import of artificial yarn and staple fiber has also been abolished. Besides, the regulatory duty has been reduced from five percent to 2.5 percent on import of woven fabric of synthetic staple fiber.

The FBR issued another SRO 1042(I)/2020 dated October 13, 2020 to withdraw additional customs duty (ACD) on over 100 tariff lines.

October 14, 2020