Introduction
Navigating the Pakistan Customs Tariff (PCT) system is crucial for anyone involved in international trade, import/export operations, or supply chain management. For Pakistani traders and importers, understanding how customs duties are structured, calculated, and applied is essential for ensuring compliance, minimizing costs, and avoiding penalties or delays.
The Pakistan Customs Tariff determines the rate of duty applicable to each imported item based on its classification. Governed by the Federal Board of Revenue (FBR) under the Customs Act, 1969, the PCT is updated regularly and harmonized with international standards such as the Harmonized System (HS) Codes developed by the World Customs Organization (WCO).
This detailed guide provides a comprehensive understanding of the Pakistan Customs Tariff, its structure, classification process, and implications for businesses in Pakistan.
What is the Pakistan Customs Tariff (PCT)?
The Pakistan Customs Tariff (PCT) is an official document issued by the FBR that outlines the classification of goods and the customs duty rates applicable to each category. It is based on the Harmonized Commodity Description and Coding System—a standardized numerical method of classifying traded products.
The PCT is part of the First Schedule of the Customs Act, 1969, and is applied at the time of importation or exportation to determine the tariff rate, taxes, and regulatory duty.
Key Components of the PCT
Each entry in the Pakistan Customs Tariff includes:
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HS Code (PCT Code)
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A 8-digit classification code (e.g., 0402.2100 for milk powder)
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Description of Goods
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The official name of the item or category of items
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Customs Duty Rate (CD)
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The basic rate of import duty (e.g., 20%)
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Additional Duties
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May include Regulatory Duty (RD), Additional Customs Duty (ACD), or Anti-Dumping Duty
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Unit of Measurement (UOM)
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Specifies the standard measurement (e.g., kg, litre, piece)
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Structure of PCT Codes
The PCT code aligns with the international HS Code structure but extends to 8 digits for national classification.
| Code Structure | Description |
|---|---|
| First 6 digits | HS Code (global classification) |
| 7th–8th digits | National sub-classification |
Example:
PCT Code: 8504.4020
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8504.40 → Static converters (e.g., inverters)
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.20 → UPS (specific subclass)
Legal Framework Governing Customs Tariffs in Pakistan
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Customs Act, 1969
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Finance Act (annual updates)
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Import Policy Order
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Export Policy Order
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SROs (Statutory Regulatory Orders) issued by FBR
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Budgetary announcements and tariff revisions
How to Use the Pakistan Customs Tariff
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Determine Product Description
Know the exact nature, composition, and use of the item. -
Identify PCT Code
Use the FBR’s official Pakistan Customs Tariff Search tool or consult a customs agent. -
Check Applicable Duties
Determine applicable:-
Customs Duty (CD)
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Regulatory Duty (RD)
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Additional Customs Duty (ACD)
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Sales Tax
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Income Tax (Withholding)
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Anti-Dumping Duties (if applicable)
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Check Import Policy Compliance
Ensure the product is allowed under the current Import Policy Order and meets any conditions (e.g., licensing, labeling, safety standards).
Types of Duties in Pakistan
| Duty Type | Description |
|---|---|
| Customs Duty (CD) | Primary duty imposed on imports |
| Regulatory Duty (RD) | Additional duty to protect local industries or manage trade |
| Additional Customs Duty (ACD) | Uniform additional charge (typically 2-7%) |
| Sales Tax | Currently 18% on standard goods; some exemptions apply |
| Income Tax (WHT) | Deducted at source; rate varies (1-6%) |
| Anti-Dumping Duty | Levied to protect domestic industries from unfair pricing |
Exemptions and Concessions
Pakistan offers tariff concessions under:
1. Free Trade Agreements (FTAs)
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With China, Malaysia, Sri Lanka, etc.
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Reduced or zero duty on eligible goods with valid Certificate of Origin
2. Preferential Trade Agreements (PTAs)
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With Iran, Indonesia, and others
3. SRO-based Exemptions
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FBR issues SROs (Statutory Regulatory Orders) granting duty relief for:
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Industrial raw materials
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Machinery
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Pharmaceuticals
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Charitable organizations
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🔎 Visit https://www.fbr.gov.pk for the latest SROs and tariff schedules.
Practical Example
Case: Importing LED Lights
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Product: LED Tube Lights
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HS Code: 9405.4090
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Customs Duty: 20%
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Additional Customs Duty: 2%
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Sales Tax: 18%
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Regulatory Duty: 5%
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Income Tax Withholding: 6%
If imported under an FTA (e.g., from China), the Customs Duty might be reduced to 0%, significantly lowering overall landed cost.
How to Find Your Product’s PCT Code
Option 1: FBR Online PCT Directory
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Visit: https://www.fbr.gov.pk/pct
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Use keyword or HS code search
Option 2: Importer’s Invoice or Previous GD
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Review past Goods Declaration (GD) forms to find code history
Option 3: Consult a Licensed Customs Agent
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For complex goods, agents or consultants can identify correct classification and advise on duty optimization
Customs Valuation and Classification Issues
Valuation Rules
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Based on transaction value (CIF: Cost + Insurance + Freight)
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In case of doubt, customs can apply valuation rulings or reference values
Misclassification Risks
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Deliberate or accidental misclassification may lead to:
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Show-cause notices
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Confiscation of goods
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Heavy fines or penalties
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Delayed clearance
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Budget and Tariff Updates
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Tariff rates and classifications may change annually via the Finance Act (usually announced in June)
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Keep updated on:
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New HS code additions/removals
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Increased or reduced tariff rates
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Newly imposed or withdrawn regulatory duties
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Subscribe to Sterling.pk or FBR’s notification system to stay informed.
Challenges Faced by Traders and Importers
| Challenge | Solution |
|---|---|
| Frequent PCT updates | Subscribe to updates, hire a customs consultant |
| Complex product composition | Conduct product analysis for accurate classification |
| High duty burden | Use FTAs/PTAs or apply for SRO exemptions |
| Misclassification by agents | Cross-check entries using PCT manual or FBR portal |
| Delay in customs clearance | Pre-classify HS codes and keep documents ready |
Frequently Asked Questions (FAQs)
Q1. Can one product have multiple PCT codes?
Yes, depending on composition or usage. Proper classification is critical.
Q2. How often is the Customs Tariff updated?
Annually through the Finance Act, or periodically via SROs.
Q3. Where can I get the latest PCT handbook?
From FBR’s website or the Pakistan Revenue Automation Limited (PRAL) portal.
Q4. Is there a penalty for wrong classification?
Yes. Penalties under Section 32 of the Customs Act may apply, including fines and confiscation.
Q5. Can I appeal a customs valuation or classification?
Yes. File a review or appeal with the Collector (Appeals) or the Customs Tribunal.
How Sterling.pk Can Help
At Sterling.pk, we support traders and importers with:
✅ HS code classification and tariff determination
✅ Duty optimization via FTAs and SRO exemptions
✅ Customs clearance documentation and filing
✅ Advisory on anti-dumping, regulatory duties, and compliance
✅ Handling show-cause notices and appeals
With our expert customs consultants, you can import confidently, compliantly, and cost-effectively.
Conclusion
Understanding the Pakistan Customs Tariff is essential for any business involved in international trade. Accurate classification, up-to-date knowledge of applicable duties, and strategic use of exemptions can save your business time and money while ensuring regulatory compliance.
Let Sterling.pk be your trusted customs and trade advisory partner as you navigate Pakistan’s complex but opportunity-rich import landscape.
