Importers usually search for the Pakistan customs tariff expecting one number: the duty on their product. The tariff gives that number, but it is not the amount paid at the port. Customs duty is one layer in a stack that includes additional customs duty, regulatory duty, special excise duty on some goods, sales tax, value addition tax and advance income tax. Each layer has a different legal source, a different base and, in some cases, a different rate for a manufacturer and a trader.
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This guide is for the 2026-27 tariff year, effective 1 July 2026. It explains what changed, how to classify, how customs value is determined, how the charges stack, which concessions exist, how clearance works through the Pakistan Single Window and WeBOC, and how to build a landed cost that will survive an importer's first shipment. It is an orientation, not a customs or legal ruling.
1. What the tariff contains, and what it does not
The Federal Board of Revenue publishes the Pakistan Customs Tariff for F.Y. 2026-27 as a PDF on its Customs Tariff page. The same page carries the Fifth Schedule to the Customs Act, 1969, updated to 30 June 2026, which lists concessionary rates for plant, machinery, raw materials and other goods subject to conditions.
The tariff is organised by Harmonized System chapter. Each row gives the Pakistan Customs Tariff (PCT) code, a description and a rate. Descriptions are nested: a line marked "Other" belongs to the heading above it, so the full meaning of a code depends on the lines that precede it. The eight-digit PCT code is the unit to which every duty and tax rate attaches.
The 2026-27 tariff has a single rate column, customs duty. It does not show additional customs duty, regulatory duty, special excise duty, sales tax, value addition tax or advance income tax. An importer who reads only the tariff will understate the cash needed at the port, often by a large margin.
2. What changed on 1 July 2026
The 2026-27 year is the second year of the National Tariff Policy 2025-30. The policy aims to simplify the tariff structure, reduce the layers of protection and phase down regulatory duty by 2030. Three changes matter immediately.
| Change | 2026-27 position | What it means |
|---|---|---|
| Additional customs duty (ACD) | S.R.O. 1063(I)/2026: 2% on the 20% slab, 4% on listed exceptions, 10% on the 25%+ and specific-rate slabs, with 6% and 2% exceptions | The old 4% and 6% structure is gone. A line can move from 2% to 4%, or from 4% to 2%, depending on the schedule. |
| Regulatory duty (RD) | S.R.O. 1064(I)/2026: maximum 20%; 20% reduction for rates at or below 20%; exceptions at 5%, 2% and 1%; phase-down to 2030 | The maximum rate is lower, but many lines still carry RD. Check the table by PCT code. |
| Special excise duty (SED) | Finance Act 2026; S.R.O. 1072(I)/2026 for specified imported vehicles | A vehicle import can carry SED on top of customs duty, ACD, RD and sales tax. |
| Tariff policy | National Tariff Policy 2025-30, second-year rationalisation | Expect further annual changes; do not use last year's SROs. |
Source: S.R.O. 1063(I)/2026; S.R.O. 1064(I)/2026; Profit, 1 July 2026.
3. The full charge stack
Six statutory charges can apply to an ordinary import, plus anti-dumping, countervailing or safeguard duties in specific cases. Each has a different base, so the order matters.
| Charge | Where it is set | Base | Typical rate |
|---|---|---|---|
| Customs duty (CD) | Customs Tariff, by PCT code | Customs value under section 25 or 25A | 0% to 25% or a specific rate |
| Additional customs duty (ACD) | S.R.O. 1063(I)/2026 | Customs value | 2%, 4%, 10%; exceptions 6% and 2% |
| Regulatory duty (RD) | S.R.O. 1064(I)/2026 | Customs value | 0% to 20%, by PCT code |
| Special excise duty (SED) | Finance Act 2026, S.R.O. 1072(I)/2026 for vehicles | As specified for the goods | Vehicle-specific |
| Sales tax | Sales Tax Act, 1990, section 3 | Customs value plus customs duties plus federal excise duty | 18% |
| Value addition tax | Sales Tax Act, 1990, Twelfth Schedule | Import value as specified | 3%, with exclusions |
| Advance income tax | Income Tax Ordinance, 2001, section 148 | Import value plus customs duty, sales tax and federal excise duty | 1%, 2%, 5.5%; commercial 3.5% or 6% |
| Trade remedy duty | National Tariff Commission; anti-dumping, countervailing or safeguard notification | As specified | Case-specific |
Do not add the percentages together. Sales tax is charged on a base that already includes customs duty and ACD, and advance income tax is charged on a base that includes sales tax. The effective burden is higher than the sum of the headline rates, and the cash at the port is higher still.
4. How additional customs duty works
S.R.O. 1063(I)/2026 levies ACD on goods in the First Schedule. The structure is slab-based, with lists of exceptions. In broad terms:
- 2% on goods in the 20% customs duty slab.
- 4% on the listed exceptions to that slab, which include many raw materials, intermediates and specific engineering goods. PCT 8501.5290 is in this group.
- 10% on goods in the 25% and higher slabs and on specific-rate slabs.
- 6% and 2% on the listed exceptions to those groups, including some beverages and other named goods.
The notification excludes plant and machinery used in manufacturing or production of goods, classifiable under Chapters 84 and 85; imports under Chapter 99; most of the Fifth Schedule, with listed exceptions; baggage; temporary importation; and several specific SROs. It also excludes small CKD and CBU vehicles within the stated engine limits.
Two practical points follow. First, the ACD group is not the same as the customs duty rate: a 15% line can be in the 4% ACD list. Second, the plant and machinery exclusion is fact-specific. A manufacturer importing a motor for its own production line may qualify; a trader importing the same motor will not. Customs can challenge the use of the exclusion, so keep the installation, capacity and end-use evidence.
5. How regulatory duty works
Regulatory duty applies only to the PCT codes listed in the table in S.R.O. 1064(I)/2026, at the rate shown against each code. Products not in the table carry no RD. The 2026 notification caps the rate at 20%, applies a standard 20% reduction to rates at or below 20%, and retains exceptions at 5%, 2% and 1% for goods linked to exports or local production. The policy intends to eliminate RD by 2030, but the table still matters for 2026-27.
RD is not a substitute for customs duty and does not create an exemption from sales tax or advance income tax. A line can have 0% customs duty, a 20% RD and full sales tax; the total can be higher than a line with 15% customs duty and no RD. Read the RD table before assuming that a low customs duty means a low landed cost.
6. Special excise duty on vehicles
The Finance Act 2026 imposed special excise duty on vehicles specified in Table IA of the First Schedule. S.R.O. 1072(I)/2026 sets out the collection procedure: SED is levied and collected in the same manner and at the same time as customs duty under the Customs Act, 1969, and the relevant provisions of the Act apply. For a vehicle import, the charge stack can therefore include CD, ACD, RD, SED, sales tax, value addition tax and advance income tax. Vehicle importers should obtain the current SED table and the customs valuation ruling for the model before shipping.
7. Classification: the decision that sets every rate
Classification is the process of placing goods in the correct PCT code. It is governed by the General Interpretative Rules of the Harmonized System and the legal notes to the chapters. The eight-digit code is not a description of the product; it is a legal category with defined scope.
Three habits reduce classification risk. First, read the heading and the lines above the "Other" line. In heading 8501, for example, 8501.5210 (submersible stainless steel motors) carries 10%, 8501.5220 (sewing machine clutch motors) 0%, 8501.5230 (geared motors) 15% and 8501.5290 (other) 15%. The word "other" is a residual category, not a safe default. Second, keep the technical datasheet, model number, capacity and intended use. Third, if the classification is genuinely uncertain, consider a written ruling or a pre-clearance discussion with a licensed customs agent before the goods ship.
Misclassification can lead to a higher assessment, a show-cause notice, a penalty and delayed clearance. It can also work in the importer's favour on paper but create a refund or audit problem later. The correct code is the one that matches the goods and the legal notes, not the code with the lowest duty.
8. Customs value: the base for every charge
Customs value is determined under section 25 of the Customs Act, 1969, using the transaction value: the price actually paid or payable for the goods, adjusted for freight, insurance and other specified costs. If the transaction value cannot be accepted, section 25A provides fallback methods, starting with the value of identical goods, then similar goods, then deductive and computed values, and finally a flexible method.
Related-party transactions receive closer scrutiny. The price must be at arm's length, and Customs can ask for evidence of the relationship, the pricing policy, comparable transactions and the effect on value. A low invoice from a related supplier is not automatically accepted. Valuation rulings and reference values can also apply to specific goods; the Directorate General of Customs Valuation issues rulings from time to time, and Customs may use them to test a declared value.
Keep the commercial invoice, contract, letter of credit, bank remittance, freight and insurance documents, and any transfer-pricing file. If the declared value is challenged, the importer has the burden of explaining the price, not just asserting it.
9. Concessions and special schemes
A concession is not a right until its conditions are met. The main routes are:
| Route | What it can do | Conditions and risks |
|---|---|---|
| Fifth Schedule, Customs Act 1969 | Concessionary customs duty for listed plant, machinery, raw materials and other goods | Goods, use and importer must fit the entry; post-import conditions may apply |
| Plant and machinery for manufacturing | ACD exclusion for Chapters 84 and 85; possible Fifth Schedule concession | Must be for own manufacturing or production; evidence of installation and use |
| Special Economic Zones | Zone-specific fiscal and procedural package | Zone, developer and enterprise conditions; confirm current SEZ regime |
| DTRE and Export Facilitation Scheme | Duty and tax remission or facilitation for exporters' inputs | Registration, input-output ratios, export obligation and reconciliation |
| Temporary importation | Relief for goods imported for a temporary purpose | Security, re-export deadline and conditions in S.R.O. 492(I)/2009 |
| Baggage and charitable goods | Special rules and exemptions | Eligibility, limits and documentation |
A concession on customs duty does not automatically remove ACD, RD, sales tax or advance income tax. Each notification has its own exclusions. Build the exemption map notification by notification, and keep the evidence that the conditions are satisfied after clearance.
10. Trade agreements and rules of origin
Pakistan has preferential trade arrangements, including the China-Pakistan Free Trade Agreement, the EU GSP+ scheme and the South Asian Free Trade Area. Each can reduce customs duty for qualifying goods, but each has its own product coverage, rules of origin, certificate and direct-consignment rules. A certificate of origin is not a discount voucher; the goods must meet the origin rule, and the certificate must be valid and correctly completed.
Preferential treatment generally affects customs duty, not sales tax or advance income tax. A shipment that qualifies for a lower customs duty can still carry full sales tax and advance tax. Confirm the current tariff preference and origin rule for the specific PCT code before relying on the agreement in a costing.
11. The clearance process
Most commercial imports are cleared through the Pakistan Single Window and WeBOC. The exact steps vary by port, goods and risk profile, but the sequence is usually:
- Pre-shipment. Confirm the PCT code, the customs value, the permits and the certificate of origin. Check the Import Policy Order for restrictions or prohibitions.
- Documents. Commercial invoice, packing list, bill of lading or airway bill, insurance, contract or letter of credit, certificate of origin and any sector permit.
- Goods declaration. A licensed customs agent files the GD in WeBOC and attaches the documents. The declaration includes the PCT code, value, quantity and claimed concessions.
- Assessment. Customs checks the classification, valuation and exemptions, and may raise a query or assess additional duty.
- Examination. The goods may be examined physically or by scanner, depending on the risk channel.
- Out-of-charge. After duty and taxes are paid, Customs issues the out-of-charge, and the port or terminal releases the goods.
- Delivery. The agent arranges transport; demurrage and detention can accrue if the process is slow.
Keep a complete file for each shipment. The declaration, assessment, payment receipts, examination report and out-of-charge are the record for any refund, audit or dispute.
12. A worked example: three-phase electric motors
The example uses PCT 8501.5290, AC motors, multi-phase, of an output exceeding 750 W but not exceeding 75 kW, "Other". The 2026-27 tariff sets customs duty at 15%. The 2026 ACD notification lists the code in the 4% group. The code is not in the RD table, so RD is nil. Sales tax is 18%; value addition tax is 3% for a trader and excluded for a manufacturer importing Chapter 84 and 85 plant for its own use. The code is not named in Part I or Part II of the Twelfth Schedule to the Income Tax Ordinance, so it falls in Part III.
All figures are per PKR 1,000,000 of customs value. The example assumes no concessionary notification, no SED, and the stated customs value.
| Step | Manufacturer, own plant | Trader |
|---|---|---|
| Customs duty, 15% | 150,000 | 150,000 |
| Additional customs duty, 4% | 0, plant and machinery exclusion | 40,000 |
| Regulatory duty | 0 | 0 |
| Sales tax, 18% | 207,000 | 214,200 |
| Value addition tax, 3% | 0, Chapter 84 and 85 plant exclusion | 35,700 |
| Advance income tax | 74,635, 5.5% | 84,252, 6% |
| Cash at the port | 431,635 | 524,152 |
For the manufacturer, sales tax is charged on 1,150,000 (customs value plus customs duty) and advance income tax on 1,357,000 (that figure plus sales tax). For the trader, sales tax is charged on 1,190,000, value addition tax on the same base, and advance income tax on 1,404,200. The bases should be confirmed for the importer's own case.
Three points follow. First, the importer's category matters as much as the tariff line: the same motor requires about 92,517 more cash per PKR 1,000,000 for the trader. Second, the cash at the port is not the economic cost: a registered manufacturer can usually claim sales tax as input tax, and advance income tax is adjustable against final liability. Third, the ACD group is decisive: an earlier version of this guide used 2% ACD for this line, which understated the trader's cash by 25,616 per PKR 1,000,000.
13. Common mistakes
- Using last year's SROs. ACD and RD notifications are reissued every 30 June and supersede the previous year's. The 2026-27 ACD structure is not the 2025-26 structure.
- Reading only the customs duty column. ACD, RD, SED, sales tax, value addition tax and advance income tax can add more than the duty itself.
- Using the wrong "Other" line. The residual line is not a safe default. Classification decides the rate.
- Assuming a concession applies. The Fifth Schedule, plant and machinery exclusion, SEZ, DTRE and EFS all carry conditions and evidence requirements.
- Ignoring the valuation issue. A low invoice from a related party, or a value below the reference value, can be rejected or questioned.
- Treating recoverable taxes as cost, or the reverse. Sales tax and advance income tax may be recoverable or adjustable, but the cash still has to be financed.
- Forgetting the port and agent costs. Demurrage, detention, transport, clearing agent fees and bank charges are part of the landed cost even though they are not customs duties.
14. Disputes, refunds and appeals
If Customs disputes the classification, value or exemption, the first step is to read the assessment and the show-cause notice and respond with documents, not assertions. The Customs Act provides for review and appeal through the Collector (Appeals) and the Appellate Tribunal, with further recourse to the High Court on a point of law. Refund claims have their own procedure and limitation periods. A voluntary correction before clearance is usually cheaper than a dispute after it.
Anti-dumping, countervailing and safeguard duties are separate trade-remedy measures imposed by the National Tariff Commission after an investigation. They are not customs duty and are not negotiated with the clearing agent. Check whether a product is subject to a current measure before pricing the import.
15. Landed-cost checklist
- Eight-digit PCT code, with the heading and "Other" lines checked.
- 2026-27 customs duty rate.
- 2026 ACD rate from S.R.O. 1063(I)/2026, including the correct group.
- 2026 RD rate from S.R.O. 1064(I)/2026, if the code is listed.
- SED, if the goods are vehicles or another specified category.
- Sales tax, value addition tax and advance income tax bases.
- Fifth Schedule, SEZ, DTRE, EFS or temporary-import eligibility and conditions.
- Trade agreement and rules of origin, if a preference is claimed.
- Customs value evidence: invoice, contract, freight, insurance, related-party file.
- Permits, Import Policy Order restrictions and product-specific compliance.
- Port, terminal, agent, transport, demurrage and financing costs.
- A written calculation, dated and tied to the SROs used.
16. How PIVRA can help
PIVRA can review the classification, build a landed-cost model for your actual shipment, map the ACD, RD, SED, sales tax and advance tax treatment, and identify the concessions or trade preferences you may qualify for. We work with your customs agent and tax adviser; we do not replace either. Request a service or see our tax and customs support.
Sources
All sources accessed 24 October 2026. Rates are as notified on 30 June 2026 and effective 1 July 2026 unless stated. This is an orientation, not a ruling.
- Federal Board of Revenue, Customs Tariff page: Pakistan Customs Tariff F.Y. 2026-27 and F.Y. 2025-26; Fifth Schedule to the Customs Act, 1969, updated 30 June 2026.
- S.R.O. 1063(I)/2026, additional customs duty, 30 June 2026.
- S.R.O. 1064(I)/2026, regulatory duty, 30 June 2026.
- S.R.O. 1072(I)/2026, special excise duty on imported vehicles, 2026.
- Customs Act, 1969, sections 18, 25, 25A and the Fifth Schedule; Customs Rules, 2001.
- Sales Tax Act, 1990, sections 2(46), 3 and the Twelfth Schedule, as amended by the Finance Act 2026.
- Income Tax Ordinance, 2001, section 148 and the Twelfth Schedule, as amended by the Finance Act 2026.
- National Tariff Policy 2025-30, Ministry of Commerce.
- Profit, Government cuts regulatory and additional customs duties on imports from July 1, 1 July 2026.
- Pakistan Single Window and FBR, WeBOC and customs clearance guidance.
- National Tariff Commission, anti-dumping, countervailing and safeguard measures, current notices.