Importers often discover—sometimes months later—that customs duties or charges were overpaid due to error, miscalculation, or misinterpretation. However, Pakistan’s customs law places a strict time restriction on refund claims.
For tax year 2026, the Federal Board of Revenue (FBR) has reiterated that refund applications filed after the prescribed time limit are not entertainable, regardless of the reason for delay.
⏰ What Is the Legal Time Limit for Customs Refunds?
Under Section 33(1) of the Customs Act, 1969, a refund of customs duties or charges:
• Must be claimed within one year
• The overpayment must arise due to:
o Inadvertence
o Error
o Misconstruction
📌 Any claim filed after one year from the date of payment is barred by law.
📅 Special Cases: When Does the One-Year Period Start?
The law recognizes different starting points depending on the nature of payment:
🧮 Provisional Assessment (Section 81)
If duties were paid provisionally:
• The one-year period starts from the date of adjustment
• Adjustment occurs after final assessment
(Section 33(2))
⚖️ Refund Due to Court or Tribunal Decision
If the refund becomes due because of:
• An order by Customs
• Decision of the Board (FBR)
• Appellate Tribunal ruling
• Court judgment
➡️ The one-year limitation starts from the date of that decision or judgment
(Section 33(3))
🔍 How Long Does FBR Take to Process a Refund?
According to Section 33(3A):
• Refund claims are subject to pre-audit
• Must be disposed of within 120 days from filing
⏳ The Collector of Customs may extend this period by up to 90 days, provided reasons are recorded in writing.
🚫 When Is Refund Not Allowed?
Under Section 33(4), no refund will be sanctioned if:
• The customs authority is satisfied that the incidence of duty or taxes has been passed on
• Meaning: the burden was transferred to the buyer or end consumer
This rule prevents unjust enrichment.
🏢 Who Can Sanction Refunds?
As per Section 33(5):
• The Federal Board of Revenue specifies:
o Jurisdiction
o Monetary limits
o Powers of customs officers
• These powers are notified through the official Gazette
✅ Key Takeaways for Importers (2026)
• Refund claims must be filed within one year
• Different “start dates” apply in provisional or judgment-based cases
• Pre-audit is mandatory for all refunds
• Passing on duty to consumers disqualifies refund
• Late claims are automatically rejected
💡 Compliance Tip
Maintain a post-clearance duty review system to identify overpayments early. Missing the one-year deadline means permanent loss of refund entitlement, regardless of merit.
Disclaimer: This article is provided for general informational purposes only and does not constitute legal, tax, or professional advice. The content is based on Section 33 of the Customs Act, 1969 (as updated for tax year 2026) and prevailing explanations issued by the Federal Board of Revenue (FBR). Customs laws, procedures, and interpretations may change over time. Readers are advised to consult the relevant statutory provisions, Pakistan Customs, or a qualified customs or legal professional before filing any refund claim. The publisher shall not be liable for any loss or damage arising from reliance on this information.