As per the notification, these updated duties will take effect from July 1, 2025, and will remain in force until June 30, 2026, unless amended earlier. The revised RD structure has resulted in a significant decrease in prices for SUVs and 4×4 vehicles.
Regulatory Duty is an additional tax imposed by the government on imported products to regulate import volumes, protect domestic industries, or generate supplementary revenue. In the automotive sector, RD directly influences the pricing of imported vehicles. These measures aim to reduce the import of luxury cars, control the trade deficit, and promote local production and assembly.
RD on SUVs and 4×4 Vehicles
Under the updated duty structure, all SUV and 4×4 vehicles, whether new or used and across all engine sizes, will now be subject to a 50% Regulatory Duty. This major cut is expected to bring down the prices of popular luxury models such as the Toyota Prado and Land Cruiser.
Impact on Local Assemblers
For businesses involved in local vehicle assembly, the RD on CKD (completely knocked down) and SKD (semi-knocked down) kits remains unchanged at 5%, provided these kits are not specifically listed in the duty schedule. This move is intended to support the domestic auto manufacturing industry and reduce dependence on fully built imported vehicles.
Additionally, the notification highlights that vehicles imported with bullet-proofing or other security enhancements will be assessed under SRO 1121(I)/2007 to ensure standardized valuation for tax purposes.
Unless revised earlier, this RD policy will be applicable for the entire fiscal year 2025–26 and should be considered when planning any vehicle import activity. While the new duty structure may pose challenges for those importing high-end or used vehicles, especially SUVs, it offers continued support for local manufacturers through reduced duties on assembly kits.
As per the notification, these updated duties will take effect from July 1, 2025, and will remain in force until June 30, 2026, unless amended earlier. The revised RD structure has resulted in a significant decrease in prices for SUVs and 4×4 vehicles.
Regulatory Duty is an additional tax imposed by the government on imported products to regulate import volumes, protect domestic industries, or generate supplementary revenue. In the automotive sector, RD directly influences the pricing of imported vehicles. These measures aim to reduce the import of luxury cars, control the trade deficit, and promote local production and assembly.
