In a recent development, the Federal Board of Revenue (FBR) has introduced a new policy that has significant implications for the transit of commercial goods through Pakistan into Afghanistan. The FBR has imposed a 10 percent processing fee on major categories of Afghan transit commercial goods. This fee applies to a range of products, including confectionaries/chocolates, footwear, machinery (mechanical/electrical), blankets/home textiles, and garments imported into Afghanistan in transit via Pakistan. The FBR’s decision to implement this fee is outlined in SRO.1380(I)/2023, which was issued on a Tuesday.
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Understanding the New Processing Fee
According to the notification, the FBR has invoked the powers conferred by section 18D of the Customs Act, 1969, to impose a processing fee at the rate of 10% ad valorem on specific Afghan transit commercial goods that are imported into Afghanistan while transiting through Pakistan. These goods fall into several major categories, each identified by specific Pakistan Customs Tariff headings (HS Codes).
Confectionaries and Chocolates
The first category subject to the processing fee includes confectionaries and chocolates. The relevant HS Codes for these products are as follows:
- 1704.1000
- 1704.9010
- 1704.9090
- 1804.0000
- 1805.0000
- 1806.2010
- 1806.2090
- 1806.3100
- 1806.3200
- 1806.9000
Footwear
The second category comprises footwear, and it encompasses the following HS codes:
- 6401.9200
- 6401.9900
- 6402.1900
- 6402.2000
- 6402.9900
- 6403.1900
- 6403.4000
- 6403.5900
- 6403.9100
- 6403.9900
- 6404.1100
- 6404.1900
- 6404.2000
- 6405.1000
- 6405.2000
- 6405.9010
- 6405.9090
- 6406.1000
- 6406.2010
- 6406.2090
- 6406.9000
Machinery (Mechanical and Electrical)
The processing fee also applies to machinery falling under chapters 84 and 85, with the exclusion of home appliances that are completely built up (CBUs).
Blankets and Home Textiles
Blankets and home textiles are another category subject to the fee, encompassing HS Codes such as 6301, 6302, 6303, 6304, 6305, 6306, 6307, 6308, and 6310.
Garments
Lastly, the processing fee extends to various garments under HS codes of 6101, 6102, 6103, 6104, 6105, 6106, 6107, 6108, 6109, 6110, 6111, 6112, 6114, 6115, 6116, 6117, 6201, 6202, 6203, 6204, 6205, 6206, 6207, 6208, 6209, 6210, 6211, 6212, 6213, 6214, 6215, 6216, and 6217.
Exemptions for Pre-existing Afghan Transit Goods Declarations (AT-GDs)
It’s important to note that the provisions of this notification shall not be applicable to the Afghan Transit Goods Declarations (AT-GDs) filed prior to the issuance of this notification. This means that goods that were already in transit through Pakistan and had their declarations submitted before the implementation o
