Federal Board of Revenue (FBR) has imposed 11 percent additional customs duty on those imported parts/ components of Sports Utility Vehicles (SUVs) of engine capacity below1800cc, which are now being locally manufactured in Pakistan. According to an SRO 936(I)/2019 issued by the FBR here on Wednesday, the FBR has amended SRO 693(I)/2006, dated July 1, 2006. The FBR has substituted existing Appendix-I with the new appendix of SRO 693(I)/2006.
The federal government has now issued SRO after seeking approval of the ECC and cabinet. In this regard, Muhammad Javed Ghani, FBR Member (Customs-Policy), has made a presentation to the Economic Coordination Committee (ECC) of the Cabinet. According to the presentation of FBR Member to the ECC, the issue is related to the levy of additional customs duty on localised parts of sports utility vehicles (SUVS) by amending SRO 693(I)/2006.
Muhammad Javed Ghani informed the ECC that the deletion programme for vehicles assembled in Pakistan is regulated by Ministry of Industries & Production (MoIP) through Auto Industry Development Policy (AIDP). Under this policy, when an assembler starts manufacturing a new category of vehicles on the recommendation of MoIP, additional customs duty (ACD) is levied on those imported parts/ components of that vehicle which are being locally manufactured.
According to the FBR, the Sports Utility Vehicles (SUVs) of engine capacities below 1800cc are now being assembled in Pakistan. It has been proposed that on MoIP's recommendation, new PCT codes were created in Pakistan Customs Tariff through Finance Act 2019 including PCT headings 8703.2250 (in kit form), 8703.2260 (Sports utility vehicle), 8703.2312 (in kit form) and 8703.2313 (Sports utility vehicle).
The MoIP has also proposed for incorporation of these new PCT codes in SRO 693(I)/2006 for levy of ACD so that 11% ACD may be levied on those imported parts/ components of these vehicles, which are now being locally manufactured, added Ghani.