Duty-free import of ‘Land Cruiser’ vehicles by FC KP: MoI may scrap proposal after IMF curbs

ISLAMABAD: The Ministry of Interior (MoI) is likely to abandon a proposal for the duty-free import of Toyota Land Cruisers by the Frontier Corps KP (South) for operational purposes, following restrictions imposed by the IMF on duty exemptions, sources informed Business Recorder.

Sources explained that the HQs of Frontier Corps KP (South) in D.I. Khan, as a key federal civil armed force, is involved in various security tasks, including border control, internal security, and law enforcement in its area of responsibility. The force also handles the apprehension of illegal immigrants, anti-gunrunning and anti-drug trafficking duties, and counterterrorism operations against miscreants and anti-state elements.

The Frontier Corps KP (South) operates in South Waziristan, North Waziristan, and Kurram tribal districts. Given the heightened internal security threat, protecting troops during casualty evacuations and quick reaction force operations is crucial. In this context, the department has partnered with SMTAC in Karachi to manufacture armored protection vehicles offering B-7 level protection against armored-piercing rounds used by terrorists.

Here is the first look inside the 2022 Toyota Land Cruiser 300 Series

The plan involves the production of 12 armored protection vehicles by SMTAC in 2025, with the expenses borne by Frontier Corps KP (South). These vehicles will be built on Toyota Land Cruiser LC-79 (2020-24 model) chassis and will provide protection to a full crew of eight troops.

To reduce project costs and meet operational requirements, the force had requested an exemption from customs duties on the import of 12 Toyota Land Cruiser LC-79 vehicles. In response, the Federal Board of Revenue (FBR) was asked to issue a No Objection Certificate (NOC) for the customs duty exemption.

However, in a letter dated February 21, 2025, FBR stated that the Board’s power to grant special exemptions under Section 20 of the Customs Act, 1969, had been revoked through the Finance Act of June 29, 2015. Now, exemptions can only be granted in special circumstances under Section 19 of the Customs Act, which requires approval from the federal government, specifically the Federal Cabinet.

Section 19 states that the federal government has the authority to exempt goods from customs duties in certain circumstances, such as for national security, natural disasters, or national economic interests, among others. This can also apply to agreements with international financial institutions or foreign governments operating under memoranda of understanding or other arrangements with Pakistan.

FBR advised that the Ministry of Interior & Narcotics Control should initiate a summary to seek exemption from duties and taxes from the Economic Coordination Committee (ECC) of the Cabinet if it believes the case qualifies based on the circumstances outlined by Frontier Corps KP (South).

During the ensuing discussion, the forum noted that Ministry of Interior and Narcotics Control had presented an incomplete summary, lacking information about the expenditure required for procurement of vehicles as well as amount to be exempted in proposed exemption of Custom duties on import of vehicles. While emphasizing significance of the matter, the forum also observed that due diligence had not been exercised in preparation of the case for ECC. The forum enquired from the FBR whether tax exemption could be granted under on-going arrangement with the International Monetary Fund or otherwise.

After discussion the ECC directed that the Ministry of Interior and Narcotics control shall provide details of anticipated expenditure required for procurement of armoured vehicles and amount required to be exempted in proposed exemption of Custom duties on import of vehicles, in the next meeting of the ECC for its consideration.

The ECC also directed the Federal Board of Revenue (FBR) to review its current stance in the light of Finance Act, 2015 and furnish its updated views in the next meeting of the ECC.

Copyright Business Recorder, 2025