FBR Massively Reduces Import Duties on Cars, Food, and Other Items

The Federal Board of Revenue (FBR) Monday issued customs notifications to reduce regulatory duties and Additional Customs Duties (ADCs) on the import of thousands of items under customs tariff rationalization plan from July 1, 2025.

The FBR has issued SRO.1151(I)/2025 and SRO.1152(I)/2025 on Monday.

The SRO.1151(I)/2025 is related to the levy additional customs duty on import of goods and SRO.1152(I)/2025 deals with the imposition of regulatory duty on imported items.

The RDs have been reduced on the import of 1,022 items. The additional customs duty would be applicable on the import of specified goods. No RD will be applicable on the import of goods covered under customs duty slabs of zero percent, 5 percent and 10 percent.

Additional Customs Duties (ACDs) – Effective July 1, 2025

• Two percent ACD will be charged on:

  • Goods under the 15 percent tariff slab

  • Goods imported under SRO.655(I)/2006 and SRO.656(I)/2006

  • Goods imported under specified PCT codes

  • Cars, jeeps, and light commercial vehicles in CKD condition exceeding 1,000cc

  • Heavy commercial vehicles in CKD condition

• Six percent ACD will be charged on:

  • Goods under the 30 percent tariff slab

  • Goods under higher slabs, including slabs of specific rates

• Value of goods for ACD purposes will be as determined under Section 25 or Section 25A of the Customs Act, 1969.

• Exemptions from ACD under SRO.1151(I)/2025:

  • Import of plant and machinery used in manufacturing/production under Chapters 84 and 85

  • Import under Chapter 99 of the First Schedule

  • Import under the Fifth Schedule to the Customs Act, excluding specified items

  • Import under Baggage Rules, 2006

  • Import under:

    • SRO.577(I)/2005 (dated June 6, 2005)

    • SRO.565(I)/2006

    • SRO.693(I)/2006

  • Import under Temporary Importation Scheme

  • Imports by E&P companies, their contractors and service companies for offshore projects under condition (vii) of SRO.678(I)/2004

  • Import of cars, jeeps, and light commercial vehicles in CKD condition up to 1,000cc

  • Import of vehicles in CBU condition up to 850cc

  • Imports under PCT codes:

    • 8703.8030

    • 8711.6040

    • 8711.6060

Regulatory Duties (RDs) – Effective July 1, 2025

• RD phasing out plan over five years:

  • Maximum RD rate to be reduced from 90 percent to 50 percent

  • Complete RD removal on 554 raw materials and intermediary goods

  • Reduced RD on 602 goods

• Exemptions from RD under SRO.1152(I)/2025:

  • Imports under:

    • SRO.678(I)/2004

    • Chapter 99 of the First Schedule to the Customs Act, 1969

    • Fifth Schedule to the Customs Act, 1969

    • Temporary Importation Scheme

  • Import of:

    • Special steel round bars and rods of non-alloy steel (specified diameter)

    • Grain and non-grain oriented electrical steel sheets

    • Rubber Apron and Cots (PCT code 4016.9990)

    • Vehicles in CBU condition imported by new entrants

    • Input materials used for manufacturing auto parts by local vendors under SRO.655(I)/2006

• Five percent RD will apply to:

  • CKD/SKD kits of home appliances listed in the table (if not specified separately)

Tariff Rationalization Plan

• Overall tariffs to be reduced from 20.19 percent to 9.70 percent over five years

• Customs duty slabs to be revised:

  • From five slabs to four slabs: 0 percent, 5 percent, 10 percent, and 15 percent

• Maximum customs duty to be capped at 15 percent over the next five years

• All Additional Customs Duties (ACDs) to be eliminated in four years

  • ACD reductions will cover 7,500 tariff lines

  • Complete exemption for items under lower slabs

• Auto sector ACDs:

  • Subject to the Auto Industry Development and Export Policy (AIDEP)

  • Will be phased out gradually starting July 1, 2026

• Regulatory Duties (RDs):

  • To be fully eliminated in five years

  • Changes will follow annual RD reduction targets

  • Relevant notifications to be issued starting July 1, 2025

• Fifth Schedule of the Customs Act will be phased out gradually in five years

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