What are regulatory duty and additional customs duty, and why are they charged on some imports but not others?

What does the law say?

Section 18 of the Customs Act, 1969, as amended to 30 June 2025, sets up layers of customs duty on imports.

Ordinary customs duty (section 18(1)). Duty is levied “at such rates as are prescribed in the First Schedule or under any other law” on goods imported into Pakistan. Section 18(1A) adds that some goods are charged at rates prescribed in the Fifth Schedule instead, subject to the conditions set out there.

Regulatory duty (section 18(3)). The Federal Government may, by notification in the official Gazette, levy a regulatory duty on “all or any of the goods imported or exported, as specified in the First Schedule”. The rate cannot exceed one hundred per cent of the value of the goods as determined under section 25 or section 25A. Section 18(4) says this duty is in addition to the ordinary duty under section 18(1).

Additional customs duty (section 18(5)). The Federal Government may, again by Gazette notification, levy an additional customs duty on imported goods specified in the First Schedule, at a rate not exceeding thirty-five per cent of value under section 25 or 25A. A proviso says the cumulative incidence of duty under sub-sections (1) and (5) shall not exceed the rates Pakistan has agreed to under multilateral trade agreements. Section 18(6) makes it payable in addition to the duties under sub-sections (1) and (3).

Special customs duty (section 18A). A separate power lets the Federal Government levy a special customs duty on imports that are the same kind of goods as those produced or manufactured in Pakistan, at a rate not exceeding the federal excise duty on the local goods. The last proviso says this duty does not form part of the value of supply for the Sales Tax Act, 1990.

Why do some imports carry these duties and others do not?

Because none of them applies automatically. Regulatory duty, additional customs duty and special customs duty are each levied only on goods that a notification names. If your product’s tariff heading is not covered by a current notification, the duty is not charged on it. If it is covered, the duty is charged at the notified rate, which may be anything up to the cap in the Act.

That is also why rates can change in the middle of the year. Sections 18(4)(b) and 18(6)(b) say each duty is leviable “on and from the day specified in the notification”, even if the Gazette carrying it is published after that day.

How is the amount worked out?

All three caps are expressed as a share of value “as determined under section 25”, or section 25A where a valuation ruling applies. Section 25(1) starts from the transaction value, the price actually paid or payable for the goods when sold for export to Pakistan, with the additions listed in section 25(2) such as freight, insurance and loading charges to the port of importation.

Which rate applies is fixed by section 30: the rate in force on the date the goods declaration is “manifested”, which the Explanation to section 30 defines as the point when a machine number is allocated and registered in customs records. For goods cleared from a warehouse, a later proviso uses the payment date if duty is not paid within seven days.

Worked example (illustrative figures)

Bilal imports a consignment into Karachi with a customs value of Rs. 2,000,000 under section 25. The real rates for his goods would come from the First Schedule and the notifications, which this site does not hold, so the rates in steps 2 to 4 are hypothetical and chosen only to show the arithmetic.

1. Legal ceilings from the Act. Regulatory duty cannot exceed 100% of Rs. 2,000,000 = Rs. 2,000,000. Additional customs duty cannot exceed 35% of Rs. 2,000,000 = Rs. 700,000.
2. Ordinary duty at a hypothetical 20%. 20% of Rs. 2,000,000 = Rs. 400,000.
3. Regulatory duty at a hypothetical 10%. 10% of Rs. 2,000,000 = Rs. 200,000.
4. Additional customs duty at a hypothetical 2%. 2% of Rs. 2,000,000 = Rs. 40,000.
5. Customs duties together. Rs. 400,000 + Rs. 200,000 + Rs. 40,000 = Rs. 640,000.

Sales tax and advance income tax at import stage are separate charges under other laws and are not included here.

What if the notification changes after my goods are shipped?

Section 30 ties the rate to the date the goods declaration is manifested, not the date of shipment or the invoice date. A proviso deals with declarations filed before the vessel arrives: if the rate changes between filing and berthing (or border cross-over for vehicles), the berthing or cross-over date is used instead.

What if my goods are exported rather than imported?

Section 18(2) says no export duty is levied on goods exported from Pakistan. Section 18(3), however, still refers to regulatory duty on goods “imported or exported”, so the text allows regulatory duty on exports if a notification imposes it. Additional customs duty under section 18(5) refers only to imported goods.

Common mistakes

• Treating the cap as the rate. 100% and 35% are ceilings in section 18. The rate actually charged is the one in the notification.
• Assuming regulatory duty replaces ordinary duty. Section 18(4)(a) says it is in addition to the section 18(1) duty.
• Assuming a duty-free tariff line means no regulatory duty. The Act does not tie the two together. A notification can name goods regardless of their First Schedule rate.
• Using the invoice date for the rate. Section 30 uses the manifest date of the goods declaration.

What to check in the official text

Read section 18(1) to (6), section 18A and section 30 of the Customs Act, 1969. The First Schedule tariff and the regulatory duty and additional customs duty notifications are not reproduced in the consolidated Act held here, so the current rate for a given tariff heading has to be confirmed in those notifications. Exemptions granted under section 19 are also made by notification and are likewise outside this corpus.