FBR ( Federal Board of Revenue took a very important decision to reduce the rate of 15 percent customs duty on all the import parts consumed in the manufacturing of new motor cars in Pakistan, station wagons and racing cars are also included in this rate reduction policy. The FBR issued SRO.02(I)/2022 to amend the SRO.656(I)/2006 here on Monday.
In the recent past same car assembling parts have faced 32.5 % duty charges which were quite high and also became vital reasons for vehicle high prices in Pakistan. After FBR’s recent rate reduction policy will show massive rate changes in cars, but authorities should also keep a very close eye on the quality of the parts so that production at a low rate will not compromise the quality of the auto vehicles.
The S.R.O. 656(I)/2006 addresses the exemption of direct materials used in vehicle assembly or manufacturing, as well as components (which include sub-components, components, subassemblies, and assemblies but exclude consumables). FBR’s new rate notification purpose is to implement the 30% duty but on the other hand, the rate will reduce to 15% on new car makes and new models approved by the Engineering Development Board (EDB) for the period of the next three years which will start on the date of manufacturing and will end on coming 30, June 2026.
Imports of parts for assembly or manufacture in kit form for use in vehicles of Pakistan Customs Tariff (PCT) heading 87.03 with capacities up to 1000cc would be subject to a 15% duty (excluding specially designed twin cabin type taxi PCT heading 8703.3227 and 4-stroke auto rickshaw of PCT heading 8703.2115).
In addition to that FBR notification also mentioned that 16% duty charges will also reduce on all types of important tyers and tubes for use in Pakistan Customs Tariff (PCT) heading 87.03 vehicles with displacements up to 1000cc (excluding specially designed twin cabin type taxi PCT heading 8703.3227 and 4-stroke auto Rickshaw of PCT heading 8703.2115).
