50% vehicle duty surcharge extended to altered pre-15 May LCs

Monday, 25 May 2026 05:42 - - {{hitsCtrl.values.hits}}

Amendment covers LCs opened on or before 15 May but altered thereafter
Changes to vehicle quantity, VIN, description or specifications now subject to surcharge
Original concession exempted pre-15 May LCs from higher levy

The Government has amended its recent Gazette Notification on vehicle imports to ensure that the 50% surcharge on Customs duties also applies to Letters of Credit (LCs) opened on or before 15 May if amendments were made after the Gazette came into effect.

Under the original Gazette, the tax increase did not apply to LCs opened on or before 15 May. However, the amended Gazette, effective from 18 May, brings altered LCs within the scope of the surcharge.

Accordingly, the 50% surcharge will apply where changes have been made after 15 May in relation to the number of vehicles, vehicle identification number (VIN), vehicle description, or technical specifications.

The amendment closes a gap in the earlier notification that had allowed pre-existing LCs to remain exempt from the higher levy regardless of subsequent alterations.

The move follows allegations that some importers had got wind of the impending surcharge and placed LCs a day or two days prior.

JB Securities CEO Murtaza Jafferjee last week said going by the revelations made in Parliament, it is evident that certain parties had prior knowledge of the vehicle duty surcharge before it was officially announced.

“A straightforward remedy to prevent unjust enrichment by those who acted on privileged information would be to backdate the effective date of the surcharge by two days. Admittedly, a small number of importers who may have opened LCs during that period without knowledge of the impending change could become collateral damage. However, they would still retain the option of cancelling their imports if necessary. Such a measure would send a very strong signal regarding the seriousness of governance and the commitment of those in power to uphold fairness, accountability, and market integrity,” he added.