The federal Cabinet has approved a reduction in the additional customs duty on auto parts from seven percent to two percent to promote the local production of vehicles.
Sources said that the Ministry of Commerce (MoC) has moved a summary of the removal of additional customs duty (ACD) and regulatory duty (RD) on different items, including products in the auto sector.
The Tariff Policy board had informed the Ministry of Industries and Production that the reduction of ACD on the imports of vendors under SRO 655(1)/2006 and on heavy commercial vehicles in completely knocked down (CKD) condition had not been included during the budget exercise.
As a result, the ACDs for vendors under 655(1)/2006 and on the import of heavy commercial vehicles in CKD condition could not be reduced. This has created a tariff anomaly as the ACD is being charged at different rates for original equipment manufacturers (OEM) and vendors of the auto sector.
The tariff policy board had approved the reduction of ACD on import for vendors under SRO 655(1)/2006 as well as on the import of heavy commercial vehicles in CKD condition from seven percent to two percent in its thirty-third meeting.
Subsequently, the MoC submitted a summary to the federal Cabinet for it to implement its directions on these matters.