Duty levied to shield parts makers

Revenue Division proposes imposition of additional duty to discourage imports

ISLAMABAD:

The government has levied 11% customs duty on 13 additional items in the automobile sector to protect local auto parts manufacturers.

These goods include radial and other tyres for heavy commercial vehicles, licence plate, bracket-side reflector, side reflector, right/left side plate, front decorative component (partially legible), foot rest and plate thereof, wheel assembly and parts thereof, windscreen and parts thereof, seat base and tail box and parts thereof, centre covers and parts, and plate and parts.

The Economic Coordination Committee (ECC) of the cabinet has granted its approval in a recent meeting. The Revenue Division/Federal Board of Revenue (Customs Wing) briefed the ECC that SRO 693(I)/2006 dated July 1, 2006 contained the list of auto parts and components which had been localised (manufactured locally) and additional customs duty under sub-section (5) of Section 18 of the Customs Act, 1969 (IV of 1969), as determined by the Engineering Development Board (EDB)/Ministry of Industries & Production, was required to be levied to discourage the import of such parts, which were now being manufactured locally.

At present, more than 1,200 Pakistan Customs Tariff (PCT) codes related to auto parts, components, etc are covered under this SRO on which additional customs duty is levied at different rates, as determined by the EDB. The SRO is updated on recommendations of the Ministry of Industries from time to time. Encouraging the localisation of auto parts and components is expected to conserve foreign exchange, generate employment opportunities and create export avenues in the long run.

The Revenue Division told the ECC that the Ministry of Industries vide a letter dated September 7, 2026 had shared further recommendations for updating the list of localised parts and components in SRO 693(I)/2006 so that a higher rate of additional customs duty could be collected on these parts and components.

Accordingly, in light of recommendations of the Ministry of Industries, the Revenue Division proposed that SRO 693(I)/2006 may be updated, as per draft amended SRO, for the imposition of additional customs duty under sub-section (5) of Section 18 of the Customs Act, 1969.

It revealed that a draft summary, prepared for the ECC, was circulated to the Ministry of Finance and the Ministry of Commerce. The Revenue Division solicited approval of the ECC for the proposal. The ECC reviewed the summary titled "Amendment in SRO 693 for Levy of Additional Customs Duty on Additional Items" and approved the proposal.