IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 01 Jul 2016 | Removal date: 30 Jun 2021

Tax or social insurance relief

 On 21 March 2016, the Ministry For Industries and Production released Pakistan's Automotive Development Policy 2016-21. The below incentives for new and existing manufacturers as well tariff amendments for importers were announced in this policy.
 
The import tariff structure has been rationalized as follows -

  1. For passenger and motor vehicles
  • Import duty on sub components increased from 5% to 10%
  • Import duty on non-localized Completely Knocked Down kits reduced from 32.5% to 30% and on localized kits from 50% to 45%
  • Import duty on Completely Built Units (CBUs) of vehicles up to 800cc reduced to 40%from 50%, from 55% to 45% on CBUs between 801 to 1000cc, from 60% to 50% for CBUs between 1001cc to 1500cc, and from 75% to 65% for CBUs between 1501cc and 1800cc, applicable for the years 2017-18 and 2018-19,
  1. For motorcycles, motorcycle rickshaws, auto rickshaws and other 3 wheeler cargo loaders
  • Import duty on sub components increased from 5% to 10%
  • Import duty on non localized CKD units is rationalized from 15-20% to 15% and on localized CKDs from 47.5-50% to 45%
  • Import duty on CBUs have been rationalized from 50-65% to 50%
  1. Prime movers, buses, Heavy Commercial Vehicles (HCVs) and trailers
  • Import duty on CKD for prime movers rationalized at 5% for both non-localized (earlier 10%) and localized (earlier 0%) units
  • Import duty on CBU for prime movers rationalized at 20% for both CBUs below 280 HP (earlier 30%) and above 280 HP (earlier 15%)
  • Import duty on sub-components for Buses and HCVs (above 5 tons) has been increased from 5% to 10%
  • Import duty on CBU units of HCVs above 2 Axles has been reduced 30% to 20%

 
The following incentives are provided to Greenfield Investments i.e. installation of an assembly and manufacturing facility for the production of a make of vehicle not manufactured/assembled in Pakistan
 

  • One-time duty free import of plant and machinery for setting up the plant
  • 100 vehicles of the same variants can be imported in the form of CBUs at 50% of the prevailing duty for marketing purposes after the groundbreaking of the project
  • Reduced import duty on non-localized car parts at 10% and 25% in case of localized parts for a period of 5 years (applicable on cars and LCVs)

 
The following incentives are provided to Brownfield investments i.e. revival of existing assembly/manufacturing facilities that have become non-operational before 1 July 2013

  • Reduced import duty on non-localized car parts at 10% and 25% in case of localized parts for a period of 3 years (applicable on cars and LCVs)

 

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

441 Agricultural or forestry machinery & parts
8701 Tractors (other than tractors of heading 87.09).
870190 Other
444 Machinery for mining, quarrying & construction; parts
8704 Motor vehicles for the transport of goods.
870410 Dumpers designed for offhighway use
491 Motor vehicles, trailers & semi-trailers; parts
8701 Tractors (other than tractors of heading 87.09).
870120 Road tractors for semitrailers
8702 Motor vehicles for the transport of ten or more persons, including the driver.
870210 With compressionignition internal combustion piston engine (diesel or semidiesel)
870290 Other
8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02), including station wagons and racing cars.
870321 Of a cylinder capacity not exceeding 1,000 cc
870322 Of a cylinder capacity exceeding 1,000 cc but not exceeding 1,500 cc
870323 Of a cylinder capacity exceeding 1,500 cc but not exceeding 3,000 cc
870324 Of a cylinder capacity exceeding 3,000 cc
870332 Of a cylinder capacity exceeding 1,500 cc but not exceeding 2,500 cc
870333 Of a cylinder capacity exceeding 2,500 cc
8704 Motor vehicles for the transport of goods.
870421 g.v.w. not exceeding 5 tonnes
870422 g.v.w. exceeding 5 tonnes but not exceeding 20 tonnes
870423 g.v.w. exceeding 20 tonnes
870431 g.v.w. not exceeding 5 tonnes
8708 Parts and accessories of the motor vehicles of headings 87.01 to 87.05.
870830 Brakes and servobrakes; parts thereof
870840 Gear boxes and parts thereof
870850 Driveaxles with differential, whether or not provided with other transmission components, and nondriving axles; parts thereof
870870 Road wheels and parts and accessories thereof
870880 Suspension systems and parts thereof (including shock absorbers)
870891 Radiators and parts thereof
870894 Steering wheels, steering columns and steering boxes; parts thereof
870899 Other
492 Motor vehicle bodies; trailers & parts thereof
8708 Parts and accessories of the motor vehicles of headings 87.01 to 87.05.
870821 Safety seat belts
870829 Other
8716 Trailers and semitrailers; other vehicles, not mechanically propelled; parts thereof.
871639 Other
871690 Parts
499 Other transport equipment & parts
8711 Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without sidecars; sidecars.
871120 With reciprocating internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250 cc
871130 With reciprocating internal combustion piston engine of a cylinder capacity exceeding 250 cc but not exceeding 500 cc

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