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FBR Imposes Additional Customs Duty (ACD) on Imported Car Parts

Federal Board of Revenue (FBR) has imposed additional customs duty (ACD) on several imported items including car parts according to S.R.O.1930(1)/2022 issued on Wednesday.

The duty would be applicable on the import of seat parts made of foam, head/ armrests and seat frames, air cleaner hoses, and water cooling system hoses (except turbo system hoses) for vehicles falling under the specified Pakistan Customs Tariff (PCT) heading. The additional customs duty would also be applicable on the import of air cleaner hoses and water cooling system hoses (except for turbo system hoses) for vehicles.

The ACD would also be applicable on the import of fan pulleys for vehicles of certain PCT headings, rear combination/backup lamps, rear turning indicators, plough lamps, reverse/parking lights for vehicles; ceiling/room lamps for vehicles and wiring sets and cable sets for vehicles of specified PCT headings.

The additional customs duty would also be charged on the import of brake drums and air vacuum tanks, lever assembly for parking/hand brakes (4×2 vehicles only) for vehicles, built-up drive axles with hub and brake drum for vehicles, wheel hubs for axles for vehicles and built up non-driving axles with hub and brake drums for vehicles, dust protection caps for wheel hubs and wheel hubs for axles for vehicles, road wheels (excluding casted), rims, discs, caps, ornaments and weights for vehicles, pins for shock absorbers (4×2 vehicles only) for specified vehicles and radiators other than aluminum cores for vehicles of certain PCT headings.

Furthermore, the import of steering wheels (non-foamed) and covers steering shafts for vehicles and seat parts made of foam for vehicles of specified PCT headings are also imposed with ACD.

The recent restrictions on the import of CKD parts have badly exposed the hollow claims of high localization in local assembled vehicles. The new ACD will further dent the assemblers relying on imported parts and will likely result in another price hike. With sales already on a steep decline, the future of local assembled cars in Pakistan doesn’t look too bright. It is yet to be seen whether assemblers will buckle up to enhance the localization in true means or will just slap a price increase in wake of the imposition of new ACD on imported car parts.

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