How Pakistan Import Duty Is Calculated: CD, ACD, RD, Sales Tax, and WHT Explained

By Olympic AgenciesLast updated: 11 July 2026

Quick Answer

Pakistan's import duty is calculated on the CIF value of the goods and typically comprises five components layered on top of each other: customs duty at the First Schedule rate for the HS code, additional customs duty, regulatory duty where imposed, sales tax on the duty-paid value, and withholding income tax. Agricultural machinery imports received a full exemption from customs duty, additional customs duty, and regulatory duty under the 2026-27 federal budget for eligible HS headings.

Key facts
Duty base	Calculated on the CIF value — the cost of goods plus freight and insurance to the Pakistani port
Customs duty (CD)	The primary duty: 0 to 20 percent depending on the HS heading in the First Schedule to the Customs Act
Additional customs duty (ACD)	A flat 2 percent surcharge applied on top of the customs duty rate
Regulatory duty (RD)	Imposed on specific goods through SROs under the Customs Act to regulate imports
Sales tax	Calculated on the duty-paid value — the CIF value plus all customs duties — at the standard rate or a reduced rate

When a Pakistani importer asks "what is the duty on this," the answer is never a single percentage. Pakistan's import duty is a stack of charges calculated on the CIF value, each layer adding to the next, and the final landed cost can be meaningfully higher than the headline customs duty rate alone suggests. This guide explains what each component is, how it is calculated, and where exemptions apply — with a focus on the agricultural cargo that is the bulk of what moves through Karachi's ports.

What is the base for all duty calculations?

Everything starts from the CIF value: the cost of the goods plus the international freight and insurance to the Pakistani port of entry. If you buy on FOB terms, your clearing agent adds the actual freight and insurance charges to the invoice value to arrive at the CIF value for the goods declaration. If you buy on CIF terms, the invoice already reflects the CIF value, and Customs may verify it against its own valuation database.

The CIF value is not negotiable at the counter. Under Faceless Customs Assessment, the system compares the declared CIF against historical import data for the same HS code. If the declared value falls below a threshold, the assessing officer raises a formal query. Our explainer on FCA details how the query and response cycle works.

Customs duty — the primary layer

Customs duty is calculated as a percentage of the CIF value according to the rate set out in the First Schedule to the Customs Act 1969. The rate is determined by the 8-digit Pakistan Customs Tariff heading. The same product can carry a different rate depending on the precise HS subheading.

Typical rates for agricultural goods:

Many agricultural machinery items under specific HS headings: 0% under the 2026-27 budget exemption
Seeds and planting material under Chapter 12: generally 0% to 3%
Fertilizers under Chapter 31: generally 0% to 3%
Tractors under heading 8701: rates vary, with certain headings exempt under the 2026-27 budget

The customs duty amount is the CIF value multiplied by the rate. For example, a consignment with a CIF value of PKR 10,000,000 at a customs duty rate of 3% produces customs duty of PKR 300,000.

Additional customs duty

Additional customs duty is a flat 2% surcharge on top of the customs duty. It is calculated as 2% of the CIF value and added to the customs duty figure. On the same PKR 10,000,000 CIF value, additional customs duty would be PKR 200,000. Under the 2026-27 budget exemption for eligible agricultural machinery, ACD is also exempted, meaning machinery importers under those headings pay zero on both CD and ACD.

Regulatory duty

Regulatory duty is imposed on specific goods through SROs under Section 18 of the Customs Act. It is designed to regulate imports for trade-policy reasons rather than revenue. Regulatory duty rates can change mid-year by SRO, so a rate that applied last quarter may not apply this quarter.

Agricultural products subject to regulatory duty should be checked against the current SRO before the goods declaration is filed. The FBR website publishes active SROs, and a competent clearing agent checks the latest rate for the specific HS heading at the time of filing, not from memory of the previous shipment.

Sales tax

Sales tax is charged on the duty-paid value, which is the CIF value plus customs duty, additional customs duty, and regulatory duty. In other words, every duty layer added above increases the sales tax base.

The standard sales tax rate in Pakistan applies unless a specific SRO reduces it for the commodity in question. Continuing the example: CIF value PKR 10,000,000, customs duty at 3% = PKR 300,000, ACD at 2% = PKR 200,000, no RD. The duty-paid value is PKR 10,500,000. Sales tax at the standard rate is calculated on that PKR 10,500,000.

Withholding income tax

Withholding tax is calculated on the CIF value plus all duties, at rates that vary by importer status — commercial importer, industrial importer, or individual. The rate is set through the Income Tax Ordinance, and the amount is adjustable against the importer's annual income tax liability. For importers who are active filers, the withholding rate is lower than for non-filers.

How the stack works in practice

For a consignment with a CIF value of PKR 10,000,000, a customs duty rate of 3%, and standard sales tax:

Component	Rate	Calculated on	Amount (PKR)
CIF value	—	—	10,000,000
Customs duty	3%	CIF value	300,000
Additional customs duty	2%	CIF value	200,000
Regulatory duty	0% in this example	CIF value	0
Sales tax	Varies	CIF + CD + ACD + RD	On 10,500,000
Withholding tax	Varies	CIF + duties	Per Income Tax Ordinance rate

The duty stack is sequential: changing the customs duty rate changes the sales tax base, and changing the CIF value changes everything below it. This is why HS code classification — determining which rate applies — is the most commercially significant decision in the clearance process.

What about the agriculture machinery exemption?

The 2026-27 federal budget exempted agricultural machinery classified under specific HS headings from customs duty, additional customs duty, and regulatory duty in full. The exemption was a major policy shift covered in our complete duty exemption guide. The key conditions:

Only goods under the specifically listed HS headings qualify — neighbouring headings do not.
Sales tax and withholding tax still apply, so the exemption does not mean zero charges at the port.
Goods imported under the exemption cannot be sold or disposed of within five years without prior FBR approval.
A certificate from the Ministry of National Food Security and Research may be required to confirm the goods are a bona fide agricultural requirement.

Our HS codes reference page for seeds, fertilizer, and agricultural machinery lists the main agricultural HS headings with their duty status post-budget.

How to get an accurate landed-cost estimate before shipping

Do not rely on a supplier's informal estimate or a colleague's past experience. Duties change at the federal budget in June and can shift mid-year through SROs. The only reliable approach is:

Confirm the precise 8-digit HS code for your commodity.
Look up the current customs duty rate in the First Schedule.
Check whether any active SRO imposes regulatory duty on that heading.
Confirm whether any exemption or concession applies and under what conditions.
Calculate the full stack: CIF value, CD, ACD, RD, sales tax, WHT.
Add port and terminal charges, agent fees, and inland transport to arrive at the total landed cost.

This is what a licensed clearing agent does before you commit to a shipment. If your agent cannot show you the duty calculation in writing with the current rates, get one who can.

Olympic Agencies has calculated duty, taxes, and clearance charges for agricultural imports at Karachi Port and Port Qasim since 1982. We provide an itemised landed-cost estimate — duties, terminal charges, agent fees, inland transport — before your consignment ships, so there are no surprises at the port. Our customs clearing service covers classification, valuation, and duty processing. WhatsApp us your commodity and HS code for a cost estimate.

Need a landed-cost estimate for your shipment? Talk to our team — we calculate duty, taxes, and charges before your container sails.

WhatsApp us your shipment details →

Frequently Asked Questions

How is the customs value determined in Pakistan?+

Pakistan follows the WTO Customs Valuation Agreement. The primary method is the transaction value — the price actually paid or payable for the goods, adjusted to a CIF basis at the Pakistani port of entry. If Customs determines the declared value is too low compared to its own valuation database, it can issue a valuation ruling. Under Faceless Customs Assessment, value disputes now arrive as formal electronic queries that stop the assessment clock until resolved.

What is the difference between customs duty and regulatory duty?+

Customs duty is the standard rate set out in the First Schedule to the Customs Act 1969, varying by HS code. Regulatory duty is an additional duty imposed on specific goods through Statutory Regulatory Orders, typically for trade-policy reasons — to protect domestic production or discourage imports of certain items. Regulatory duty can change mid-year by SRO without a full budget amendment, so the rate that applied last month is not guaranteed this month.

Does the agriculture machinery duty exemption cover everything?+

No. The 2026-27 budget fully exempted customs duty, additional customs duty, and regulatory duty on agricultural machinery classified under specific HS headings, primarily in Chapter 84 and heading 8701. Sales tax and withholding tax still apply. The exemption also carries conditions: goods imported under exemption cannot be sold or disposed of within five years without prior FBR approval. Our complete machinery duty guide covers which headings qualify.

Is sales tax calculated on the CIF value or the duty-paid value?+

Sales tax is calculated on the duty-paid value: CIF value plus customs duty, additional customs duty, and regulatory duty. This means each layer of duty increases the base for sales tax, so even a small customs duty rate compounds through the calculation. For example, a 3% customs duty on an item also adds 3% to the sales tax base.

Olympic Agencies

Clearing agricultural cargo - seeds, fertilizers, and machinery - at Karachi Port and Port Qasim since 1982. Members of PIFFA and the Chamber of Commerce.