ISLAMABAD: The Tariff Policy Board (TPB), has decided to withdraw 10 percent regulatory duty on paper and paperboard industry beyond December 31, 2024 and directed an inter-ministerial consultation with the industry to devise future course of action, well informed sources told Business Recorder.
The decision was taken by the Board, an inter-ministerial body meant to take decisions about tariffs on the products, however, many of its decisions are not complied by the Federal Board of Revenue (FBR), due to revenue concerns.
Joint Secretary (Tariff Policy) apprised the Board that M/s Century Paper & Board Mills Ltd has requested to continue existing 10% Regulatory Duty (RD) on products covered under PCT Codes: 4810.9200 and 4810.9900 after December 31, 2024 and further requested to enhance the rate of RD up to 25% till June 30, 2025 on these PCTs. He stated that the current tariff structure on PCTs 4810.9200 and 4810.9900, ie, Customs duty is 20%, Additional Customs duty 6% and Regulatory duty 10%.
He added that during 2024-25 (July- 15th Dec), the import value and quantity for Multi-ply (4810.9200) decreased by 26% respectively while quantity and import value for HS code 4810.9900 increased by 111% and 67% during 2024-25 (July- 15th Dec) attributing to increased import trend from Sweden and Finland.
Century Paper & Board Mills Limited
He also noted that during budget exercise FY 2024-25, on request of Century Paper, TPB recommended to impose 10% RD on PCTs 4810.9200, 4810.9900 till December 31, 2024 while on the request of M/s Tetra Pak, TPB recommended that new entries may be created with the description “Aluminum foil (rolled but not further worked)” and “Multi-ply (clay coated paper and paper board excluding 80 mN, 150 mN, 260 mN and 370 mN” with CD@10%, and no ACD and RD, if imported by a Sales Tax registered manufacturer of Aseptic liquid food packaging material, subject to quota determination by IOCO till June 30, 2025 covered under PCTs 4810.9200, 7607.1100. however, the decision of Tariff Policy Board was not implemented by the FBR.
He explained that M/s Tetra Pak has approached Commerce Ministry with the request that despite TPB’s clear recommendations to reduce duties on materials critical for aseptic liquid food packaging industry, the FBR in Budget 2024-25 failed to implement the recommended rationalization.
On the other hand, a 10% Regulatory Duty was imposed on their essential input materials classified under HS Code 4810.9200. The new 10% RD imposition, effective until December 31, 2024, was premised on the expectation that the Board’s recommendations to rationalize import duties on other input materials for industry would be implemented.
However, as those recommendations were not acted upon, the aseptic food packaging industry now faces a double jeopardy. Not only were the import duties (Customs Duty of 20% and Additional Customs Duty of 6%) on essential materials left unchanged, but also an additional 10% Regulatory Duty was imposed on critical input materials, exacerbating the industry’s financial and operational challenges. Keeping in view this M/s Tetra Pak has requested that 10% RD imposed on HS Code 4810.9200 may not be extended beyond December 31, 2024; and the proposal of restoring the previous entry Serial No. 109 of the Table to Part (III) of the 5th Schedule to the Customs Act, 1969 and rationalizing it to 5%, may be approved.
Member Customs Policy, FBR stated that keeping in view the revenue targets the existing 10% Regulatory Duty (RD) on products covered under PCT Codes: 4810.9200 and 4810.9900 after December 31, 2024 may be continued till June 30, 2025. The representative from EDB also advocated for continuation of RD beyond December 31, 2024. He further argued that since double-coated paper is also manufactured locally, RD may be extended to provide protection to the local industry. Representatives of FBR also supported the continuation of currently imposed RD because of revenue concerns. However, Member NTC argued that in case of Paper, a preliminary Anti-dumping duty is already in place on import from China; therefore, extension of RD is not supported.
It was also discussed that the continuation of RD on the imported items will have negative implications for the downstream industry i.e., the Aseptic food packaging industry that suffered double jeopardy because of partial implementation of TPB’s earlier decision.
Copyright Business Recorder, 2025
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