Coffee sector for duty cuts
Stakeholders in Pakistan's growing coffee sector are urging the government to eliminate the 28% combined Regulatory Duty (RD) and Additional Customs Duty (ACD) on bulk instant coffee imports, arguing the current levy is stifling industry growth and preventing the development of a domestic coffee market. The duties were imposed in June 2021 under SRO 840(I)/2021 and currently include a 15% RD and 2% ACD, with other charges making up the rest.
Industry sources point to the disparity between coffee and tea imports, which face only a 13% duty. They also note that the tariff on raw instant coffee is disproportionately high compared to finished coffee products, which attract duties between 42% and 53%.
According to industry representatives, this duty regime contradicts Pakistan's National Tariff Policy, which emphasises policy predictability, value addition, and industrial efficiency. They argue that eliminating the duties would significantly lower the landed cost of bulk instant coffee, making local manufacturing more feasible and encouraging investment in domestic processing, blending, and packaging facilities.
With rising demand for coffee — driven by remote work trends and a flourishing café culture — stakeholders believe that lower raw material costs would also help bring down consumer prices and make coffee more accessible across homes and offices nationwide.
They add that reducing duties would streamline the coffee supply chain, cut administrative costs, and offer consumers a wider variety of products at more competitive prices. Industry players see strong potential in exports, saying local producers could create value-added instant coffee and ready-to-drink beverages for international markets.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
10 hours ago
- Business Recorder
Enhanced revenue collection, economic growth: FBR introduces substantial amendments to Customs Act, 1969
LAHORE: The Federal Board of Revenue (FBR) has introduced substantial amendments to the Customs Act, 1969, as part of the Finance Act 2025. These changes aim to enhance revenue collection, streamline import and export processes, and promote economic growth. The 2025 amendments to duty rates bring significant changes across multiple sectors — from textiles and electronics to building materials, automobiles, and beyond. Key changes included Cargo Tracking System (CTS), tariff rationalisation, reduction in Additional Customs Duty (ACD) rates, Regulatory Duty (RD) Regime, exemption regime, and sector-specific changes. So far as CTS is concerned, a new section 83C has been added to the Customs Act, 1969, introducing CTS to monitor imports, exports, and transit goods. The system will be implemented once the necessary technological infrastructure is developed. On the tariff rationalisation front, new tariff slabs of 5%, 10%, and 15% have been introduced, while existing slabs of 3%, 11%, and 16% have been abolished. The 0% tariff slab has been extended to further 916 PCT codes. Similarly, Additional Customs Duty (ACD) rates have been reduced on various tariff slabs, including 0%, 5%, and 10%, with some exceptions. In addition, Regulatory Duty (RD) rates have been revised downward on 1011 PCT codes, with a maximum rate reduction from 90% to 50%. On the front of exemption regime, 479 entries in Part-1, Part-III, and Part-VII of the Fifth Schedule to the Customs Act, 1969, have been deleted to streamline and reduce the cost of exemptions. Regarding sector-specific changes, knitted fabrics will now attract a duty rate of 20% or Rs 115/kg, whichever is higher in textiles. Interactive Flat Panel Displays will attract a duty rate of 20% in electronics. Duty rates on motor vehicles for transport of goods and passengers have been revised in automobiles and duty rates on solar cells and modules have been reduced in solar energy sector. So fast as implementation is concerned, the changes are effective from various dates, including February 2, 2025, and May 1, 2025. The FBR has directed concerned officers and officials to carefully review the budget documents to avoid misinterpretation or misapplication of the budgetary measures. Copyright Business Recorder, 2025
Business Recorder
10 hours ago
- Business Recorder
Freight forwarders asked to deposit security in shape of DSCs
ISLAMABAD: The Federal Board of Revenue (FBR) has directed new freight forwarders to deposit a sum of Rs 200,000 as security deposit for operating in one customs station and Rs 500,000 as security deposit for operating in more than one customs station, in the shape of Defence Saving Certificates (DSCs). The FBR has issued SRO 1222 (l)2025 to amend Customs Rules 2001 to issue new rules. According to the new rules, any person who seeks to obtain licence as freight forwarder shall make an application to the licensing authority on the format as set out in Form-A along with the specified documents with treasury challan evidencing payment of Rs 5,000 in favour of the Collector of Customs, on account of application processing fee, which shall be non-refundable. FBR issues licensing procedure for aspiring freight forwarders Upon receipt of application, the licencing authority, shall issue licence subject to fulfilment of the following conditions: (a) The applicant fulfills the conditions for grant of licence under these Rules. (b) Deposits a sum of two hundred thousand Rupees as security' deposit for operating in one customs station and five hundred thousand Rupees as security deposit for operating in more than one customs station, in the shape of Defence Saving Certificates, pledged to the Collector of Customs; and (c) execute a bond for ensuring good conduct and to follow customs rules and regulations. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business Recorder
Ministry informs Senate body: Revised notification soon to resolve Pakistan-Iran barter trade issues
ISLAMABAD: The Ministry of Commerce, Wednesday, informed Senate Standing Committee on Finance that the revised notification will be issued to resolve all barter trade issues faced by traders between Iran and Pakistan. Officials of the Commerce Ministry updated the committee that the amended SRO will be issued after receiving comments of State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR). Discussing the recent status of barter trade between Pakistan and Iran, officials stated that the Commerce Ministry has initiated barter trade on the basis of mutual understanding between the parties, and the arrangements will be finalized after the approval of FBR and the State Bank of Pakistan. Under the revised scheme, the list will be open for both imports and exports. Chairman of the committee Senator Saleem Mandviwalla directed the Commerce Ministry to end discriminatory treatment with the Mango exporters and allow all exporters to avail export facility and not limited to a particular association. FBR Member Customs (Policy) informed the committee that Ministry of Commerce has issued SRO642(I)/2023to regulate the Business-to-Business (B2B) Barter Mechanism between Pakistan, Iran, Russia and Afghanistan. However, several reservations and concerns have been raised by trade bodes, importers and exporters regarding the operational and procedural aspects of the mechanism. Owing to the issues, the barter trade regime has not taken off and so far only one company has registered for the said regime. These issues are currently under active review and discussion by a joint committee comprising representatives from the Ministry of Commerce, Ministry of Foreign Affairs (MOFA), FBR and trade bodes among others. The aim is to address stakeholder concerns and streamline the implementation of the barter trade framework in a manner that supports bilateral trade while ensuring regulatory compliance. The FBR Member also informed that the issues concerning barter trade furnished by the Collectorate of Customs Appraisement Taftan. There is no mechanism for dispute settlement between importers and exporters in the current barter regime or guaranteeing body at the level of the two states in order to ensure that Pakistani exporter receives the goods against the exported shipment This is as a genuine issue which needs to be reviewed in any future barter trade for which feedback front SBP may be sought. One of the issues which hindered the operations of the barter trade regime is that para 6(1) of the B2B SRO is based on the principle of 'import followed by export'. Added to the said provision is permission to avail concessionary SROs for duty and taxes remissions which can be prone to misuse. The said decision should be lifted to the discretion of the importer and exporter and be made part of the contract instead of the SRO. Moreover, no duty/taxes; remission should he allowed on imports for subsequent exports under the barter regime. FBR Member stated that in terms of the para 5(2) of the currently in place SRO, Pakistan's Mission in the barter partner countries has to certify that the items being traded under the B2B barter trade regime are non-sanctioned. However, so far no such list of items has been furnished to Customs so that the same is entered in the Customs computerized system so as to regulate the imports accordingly. Instead, the SRO only contains an Appendix-A with list of items which are allowed to be imported and exported to/from Iran, Afghanistan and Russia. In case of Pak-Iran bilateral trade, on account of the trade deficit and type of commodities being exported from Pakistan, concerns have been raised by importers as well as Quetta Chamber of Commerce and Industry regarding issues in offsetting the quantum of exports with imports specially in scenarios where majority of our exports consist of primary agriculture products which require sanitary and phyto sanitary standards' confirmation by the host country which sometimes arbitrarily act against our exports Hence, it is proposed that while deliberating upon any new mechanism for barter trade with Iran, guarantees must be sought so that our exports are not subjected to any non-tariff measure, FBR official said. Most importantly, the major stakeholder in the successful implementation of any barter trade regime between Pakistan and Iran are the counter-part governments, therefore, there is a need that their willingness and readiness to any barter trade procedure/regime may be prior to issuance of any new notification, FBR Member added. Copyright Business Recorder, 2025
