Aircraft, spares exempted from customs duty

The Federal Board of Revenue (FBR) has exempted import of aircraft and their different parts, etc, from payment of customs duty through Finance Bill 2018-19, according to the new Fifth Schedule of Customs Act. For the agriculture tractor having an engine capacity exceeding 26KW but not exceeding 75KW, the custom duty will be imposed at rate of 15 percent. The import duty for agriculture tractors other than mentioned above is proposed at 10 percent.
According to Finance Bill 2018, the FBR imposed one percent custom duty on import of fully dedicated LNG buses (CBU), fully dedicated LPG buses (CBU), fully dedicated CNG buses (CBU) and Hybrid electric vehicles (HEV) (CBU). For import of trailers, the proposed custom duty for 2018-19 stands at 15 percent in the budget.
In the Finance Bill 2018 presented before the National Assembly along with Fifth Schedule to the Customs Act 1969, it is stated that there would be zero customs duty on import of aircraft with special condition whether imported or acquired on wet and dry lease, in case of M/s Pakistan International Airlines (PIA) Corporation this exemption shall be admissible on and from March 19, 2015.
There will be zero customs duty on spare parts of aircraft with the condition that it should be for use in aircraft, trainer aircraft and simulators. There will be zero customs duty on maintenance kits, machinery, equipment and tools, operational tools and aviation simulators.
According to general conditions for getting this exemption on import of aircraft and spare parts, it is stated that the chief executive or the person next in hierarchy duly authorized by the chief executive or head of the importing company shall certify that the imported goods/items are the company's bona fide requirement.
He shall furnish all relevant information online to Pakistan Customs computerized system against a specific user ID and password obtained under section 155D of the Customs Act 1969 (IV OF 1969). The exemption shall be admissible on production of certificate by the Aviation Division to the effect that the intending importer is operating in the country or intends to operate in the country in the airline sector.
The list of imported item is duly approved by Aviation Division in line with policy framework approved by the government of Pakistan. In case of deviation from this policy, the collector of customs shall initiate proceedings for recovery of duty and taxes under the relevant laws.