Under Section 18 of the Customs Act, 1969, as updated for tax year 2026, the Federal Board of Revenue (FBR) has the legal authority to levy customs duties on specified goods entering Pakistan. The law also outlines when regulatory and additional customs duties may be imposed and clarifies which goods are exempt from export duty.
This provision forms the backbone of Pakistan’s customs duty regime.
What Are Dutiable Goods Under Section 18?
Dutiable goods are those on which customs duty is legally chargeable at rates prescribed in:
• The First Schedule of the Customs Act
• The Fifth Schedule (for specific imports)
• Any other applicable law in force during 2026
Categories of Goods Subject to Customs Duty
1️⃣ Imported Goods
Customs duty is levied on:
• Goods imported into Pakistan from any foreign country
📌 This is the most common category of dutiable goods.
2️⃣ Transshipped or Transported Goods
Duty applies to goods that are:
• Brought from a foreign country to one customs station
• Transported or transshipped to another customs station
• Imported at the final station without payment of duty at the first point
📌 Prevents duty evasion through rerouting of imports.
3️⃣ Bonded Goods
Goods are dutiable when:
• Moved in bond from one customs station to another
📌 Ensures revenue protection during bonded movement.
Special Case: Fifth Schedule Imports
⚠ Important Exception – Section 18(1A)
Certain goods or classes of goods are subject to:
• Duty rates prescribed in the Fifth Schedule
• Conditions, limitations, and restrictions specified therein
📌 These rates override the general provisions of Section 18(1).
Are Exported Goods Dutiable?
❌ No Export Duty
• Section 18(2) clearly states that
👉 No export duty shall be levied on goods exported from Pakistan.
📌 This provision supports export growth and competitiveness.
Regulatory Duty: When and How It Applies
What Is Regulatory Duty?
Under Section 18(3), the Federal Government may:
• Levy regulatory duty on imported or exported goods
• Impose it through a Gazette notification
Key Features
• Rate: Up to 100% of the goods’ value
• Value determined under:
o Section 25, or
o Section 25A of the Customs Act
When Does Regulatory Duty Apply?
✔ Levied in addition to normal customs duty
✔ Applicable from the date mentioned in the notification
✔ Valid even if Gazette publication occurs later
Additional Customs Duty Explained
Section 18(5): Additional Duty
The Federal Government may impose:
• Additional customs duty on specified imported goods
• Maximum rate: 35% of value
Trade Agreement Safeguard
• Combined duty under Section 18(1) and 18(5)
• Cannot exceed rates agreed under international trade agreements
When Is Additional Duty Enforced?
✔ Levied in addition to:
• Normal customs duty
• Regulatory duty
✔ Effective from the date specified in notification
Quick Snapshot: Duties Under Section 18 (2026)
| Duty Type | Applicable On | Maximum Rate |
| Customs Duty | Imported & bonded goods | As per Schedule |
| Export Duty | Exported goods | Nil |
| Regulatory Duty | Imports/Exports | Up to 100% |
| Additional Duty | Selected imports | Up to 35% |
Why Section 18 Matters in 2026
✔ Defines legal scope of customs taxation
✔ Prevents revenue leakage
✔ Supports trade policy flexibility
✔ Aligns duties with international commitments
✔ Enables quick response to economic challenges
Frequently Asked Questions (FAQs)
Are all imported goods dutiable?
Yes, unless exempted under the Customs Act or another applicable law.
Can regulatory duty apply overnight?
Yes. It becomes effective from the date mentioned in the notification, even before Gazette publication.
Is export duty completely abolished?
Yes. Section 18(2) prohibits export duty on all goods.
Conclusion
Section 18 of the Customs Act, 1969, as applicable for tax year 2026, provides a comprehensive framework for determining dutiable goods, duty types, and applicable rates in Pakistan. The provision balances revenue collection with trade facilitation and international obligations.
Disclaimer: This article is provided for general informational purposes only and does not constitute legal, tax, or professional advice. Although the information is based on the Customs Act, 1969 as updated for tax year 2026, laws, rates, and interpretations may change. Readers should consult official FBR notifications, the relevant schedules of the Customs Act, or a qualified customs or legal professional before taking any action. The publisher assumes no responsibility for reliance on this content.