Directorate of Customs Valuation has increased the rate of duty on vehicles imported with 1800cc engine displacement and above.
H.M. Shehzad, Chairman All Pakistan Motor Dealers Association (APMDA) has informed that the duty for these vehicles will increase from Rs. 200,000 to Rs. 1.5 million depending on the model.
He further added that around 400 vehicles are in this range and customs valuation mechanism has been changed without taking stakeholders into confidence.
According to ProPakistani, APMDA members sent a letter to Ishaq Dar on April 27, informing him that since 2008, assessment of customs duties for imported vehicles (new and used) is finalised by the consensus of all stakeholders including the association and local assemblers.
He also mentions that no announcement was made and that this decision was very sudden that the association members had to suspend the clearance of about 200 vehicles at the port due to the higher valuation. He said that the government will not get Rs. 3 billion in tax revenue they want as vehicles are not being cleared at the port.
Here is some important information all drivers should know before hand so that when importing cars in the near future, these will be known;
Import duty & taxes when importing into Pakistan
Import duty and taxes are due when importing goods into Pakistan whether by a private individual or a commercial entity. The valuation method is CIF (Cost, Insurance and Freight), which means that the import duty and taxes payable are calculated on the complete shipping value, which includes the cost of the imported goods, the cost of freight, and the cost of insurance. However, import duty can also be charged per unit of measure. In addition to duty, imports are subject to sales tax (VAT), excise on some products, and import regulatory duty.
Duty rates in Pakistan vary from 0% to 100%, with an average duty rate of 20.67%. Some goods can be imported free of duty (e.g. laptops and other electronic products).
Imports into Pakistan are not subject to sales tax by default. Only certain products, like cosmetics or food supplements, are subject to GST when imported into Pakistan. When applicable, the standard GST rate is 17% and the reduced rate is 5%, calculated on the sum of the CIF value, duty, import regulatory duty, and excise.
There is no minimum threshold for imports in Pakistan, i.e. import duty and taxes are always applicable on imports regardless of their value.
Other taxes and custom fees
- Excise duty is applicable on some goods such as alcohol and tobacco products. It can be applied ad valorem calculated on the sum of the CIF value and applicable duty, or it can be specific, i.e. charged per unit of measure.
- Import regulatory duty is charged on some products at a rate between 5% and 50% calculated on the CIF value.
Local Customs office and contacts
More information on import declaration procedures and import restrictions can be found at the Pakistani Customs website.
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