Import Duty in Pakistan: Tariff Rates, Customs Duty & Duty Calculation

Import duty in Pakistan is a tax imposed on goods imported into the country. The purpose of this duty is to protect local industries, generate revenue for the government, and control the flow of goods. The rates of import duty varies by product and are determined by the Federal Board of Revenue (FBR). In addition to import duty, imported goods are also subject to Sales Tax at the rate of 18% and other applicable taxes. All payments related to import duties and taxes are made in PKR (Pakistani Rupees).

The calculation of import duty in Pakistan can be either ad valorem or specific. Ad valorem duty is calculated as a percentage of the value of the goods, while specific duty is a fixed amount per unit of the goods. The method of calculation depends on the type of goods being imported. For example, the duty on certain electronics may be calculated on an ad valorem basis, while the duty on certain textiles may be calculated on a specific basis. The total duty payable is calculated based on the assessable value of the goods, which includes the cost of the goods, freight, and insurance.

HS (Harmonized System) codes play a crucial role in the calculation of import duty in Pakistan. HS codes are an international standard for classifying goods and are used to determine the applicable duty rate. Each product is assigned a unique HS code, which is used to identify the product and determine the duty rate. The FBR uses HS codes to classify goods and determine the applicable duty rate. Importers must ensure that they use the correct HS code for their goods to avoid any discrepancies or penalties.

Pakistan has signed several free trade agreements (FTAs) and preferential trade agreements (PTAs) with other countries, which provide for reduced or zero duty rates on certain goods. The rules of origin are used to determine whether goods qualify for preferential treatment under these agreements. Importers who claim preferential treatment must comply with the rules of origin and provide the necessary documentation to support their claim. The FBR verifies the compliance of the rules of origin to ensure that only eligible goods receive preferential treatment.

To calculate the import duty on a shipment of goods, the following steps are followed: (1) determine the assessable value of the goods, (2) determine the applicable HS code, (3) determine the applicable duty rate, (4) calculate the ad valorem or specific duty, (5) add any other applicable taxes, such as Sales Tax at the rate of 18%, and (6) pay the total duty and taxes in PKR. The total duty payable will depend on the type of goods, their value, and the applicable duty rate.