Up to 31% Duty on Imported Bike Parts Sparks Tariff Policy Row

In practice, a member of Pakistan's National Tariff Policy Board has criticized the government's decision to impose extra customs duties of up to 31 percent on imported vehicle tyres and motorcycle parts, saying the move conflicts with its policy of reducing trade barriers.

Key points

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• Islamabad Makes Major Changes to Driving License Issuance Oct 10, 2026 12: 43 pm.
• The Commerce Ministry remarked the relevant automotive sector notifications remained in effect even though the Auto Policy 2021 to 2026 expired in June.
• The Federal Board of Revenue remarked the proposal originated with the Ministry of Industries and Production's Engineering Development Board.

According to a Tribune report, Dr. Rubina Athar, who supported formulate the National Tariff Policy, stated the proposal to impose extra duties should have been presented to the board before being sent to the Economic Coordination Committee (ECC). She created the remarks during a panel discussion on tariff reforms organized by the UK-funded Revenue Mobilisation, Investment and Trade Initiative.

Notably, the Finance Ministry remarked the ECC had approved an further customs duty of 11 percent on imported vehicle tyres and motorcycle parts. The duty rises to 31 percent on certain motorcycle components when manufacturers import them instead of producing them locally. New 5-Year Auto Policy Nears Final Approval.

Notably, the affected motorcycle components include license plates, brackets, side reflectors, decorative parts, foot plates, wheel assemblies, windshields, seats, toolboxes, and center covers. Nevertheless, imports of these parts from China remain subject to zero duty under the Free Trade Agreement between the two countries.

In practice, the Federal Board of Revenue remarked the proposal originated with the Ministry of Industries and Production's Engineering Development Board. The Ministry of Commerce remarked the ECC had approved amendments to SRO 693(1)/2006. It covers further customs duties on certain locally manufactured parts imported by original equipment manufacturers in kit form.

Notably, the Commerce Ministry remarked the relevant automotive sector notifications remained in effect even though the Auto Policy 2021 to 2026 expired in June. It continued that the National Tariff Policy Board had previously determined that SRO 693 fell outside its remit as it was part of a separate policy framework. Electric Car Buyers to Obtain 5-Year Rs. 1 Crore Loans.

Athar argued that import substitution policies had created industries inefficient without delivering benefits to consumers. Senior economist Vaqar Ahmed cautioned that favoring selected sectors in the application of tariff policy could undermine its objectives. As other taxes and duties additionally burden businesses, nevertheless, Nimir Chemicals CEO Zafar Mehmood stated reducing customs duties alone would not necessarily lower costs.

FBR Member Customs Shakil Shah remarked advance income tax collected at the import stage tied up businesses' funds regardless of whether they ultimately produced a profit. He pressed the elimination of such withholding taxes at the import stage, arguing that importers could struggle to recover amounts withheld beyond their actual tax liability.

Rubatech CEO Zain ul Abideen remarked the National Tariff Policy, combined with the new energy vehicle policy, threatened the conventional automotive industry by favoring new energy vehicles. Athar, nevertheless, argued that industries needed pressure to overcome inefficiencies. Wajid Bukhari, secretary general of the Pakistan Association of Sizeable Steel Producers, stated the tariff policy had not significantly affected the steel industry so far, citing lower interest rates and energy costs. Stay Connected with ProPakistani.

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