Salient feature of Customs Duty

ISLAMABAD, Jun 12 (APP): Following are the salient feature of the Customs Duty proposed by the government for FY 2026-27:

GUIDING PRINCIPLES

..Strategic tariff rationalization via the National Tariff Policy (NTP) 2025-30.

..Simplification, trade facilitation, and enhancement of system efficiency.

..Targeted public health relief and economic stimulus for key sectors.

TARIFF RATIONALIZATION (NTP 2025-30):

..Reduction of the existing Customs Duty (CD) from 20% to 15% and 10%, existing 15% and 10% to 10% and 5%, and existing 5% to 0% respectively for input goods of different industrial sectors on 92 tariff lines.

REDUCTION IN ADDITIONAL CUSTOMS DUTY (ACD) RATES:

..Reduction of ACD from 6% to 4% on 449 Tariff Lines.

..Reduction of ACD from 4% to 2% on 2,107 Tariff Lines.

..Elimination of ACD from 2% to 0% on 569 Tariff Lines.

REVIEW OF REGULATORY DUTY (RD) REGIME:

..RD greater than 20% are brought down and capped at 20% for 359 Tariff Lines.

..20% reduction on all RD rates between 2.5% and 20% across 1,347 Tariff Lines.

..RD rates of 2.5%, 2% and 1% are reduced by 20% or completely eliminated – 208 Tariff Lines

REVIEW OF EXEMPTION REGIME (FIFTH SCHEDULE):

..Deletion of entries from the Fifth Schedule where concessionary CD equals or exceeds the First Schedule general tariff.

..Exemption of CD on critical cancer-related Active Pharmaceutical Ingredients (APIs) under the Fifth Schedule.

..Reduction of Customs Duty from 20% to 10% on specialized constructionrelated vehicles for construction sector.

..Exemption of CD on import on Defence Imports.

..Exemption of CD, ACD and RD on import of Agricultural Machinery.

..Exemption of CD on import of bullet proof vehicles for Shanghai Cooperation Organization Summit and for the import of bullet proof vehicles by Federal or Provincial government, for the on-going war against terrorism.

..15 new PCT Codes created and description of 2 PCT Codes amended for trade facilitation and statistical purposes.

..State warehouses authorized by Collector of Customs have been defined to bring legal clarity in the type of warehouses.

..To remove a legal lacuna, it has been clarified that the threshold of exemption for framing of misdeclaration case shall be irrespective of the number of Goods declaration involved and shall only be limited by the amount of revenue involved; by removing the words “in a case”.

..Scanning of cargo has been given legal cover to facilitate non-intrusive process of “Scanning” under the Act.

..The Board is authorized to rationalize the penalties and prescribe appeal mechanism and exempt specified class of goods or Customs stations from such penalty through Rules; for delayed GD filing/clearance of goods at ports, and also authorized Collectors to reduce such penalties.

..The Board may authorize any person, as defined under the Customs Act, to conduct auctions of auctionable goods in the prescribed manner, thereby improving efficiency and transparency.

..The maximum penalty on terminal operators for failure to honor Delay Detention Certificates issued by Customs has been increased from Rs. 500,000 to Rs. 10 million. ..A new penal clause added to prescribe specific penalty for unauthorized removal and misappropriation of goods from customs state warehouses.

..An explanation is introduced for legal clarity of the word, “removal” which shall include carrying, transporting, depositing, harboring, keeping, concealing, retailing, or any other act facilitating the movement or possession of smuggled goods.

..Any authority is now required to hand over seized goods liable to confiscation to the Customs authorities for proceedings under the Customs Act, irrespective of any pending proceedings under any other law for the time being in force with corresponding change in its penal clause.

..Faceless Adjudication introduced to avoid face to face interaction between adjudicating officer and the respondents through virtual proceedings to enhance transparency, efficiency and quick disposal of cases.

..Special Judges is being empowered to freeze assets of accused persons involved in illegal transfer of funds into or out of Pakistan to prevent dissipation of their assets during trial.

..Independent Case Scrutiny Committees being introduced to examine and decide matters relating to filing of appeals before courts to avoid frivolous litigation.

..Provision has been introduced allowing service of summons through newspaper publication where the accused person is not traceable.