Import Cost Impact of Budget 2026-27 Tariff Cuts
A broad reset of import costs
Budget 2026-27 brings one of the widest tariff rationalisations in years, carried out under the National Tariff Policy 2025-30. The main point is simple: the cost of importing inputs and capital goods is coming down across thousands of tariff lines. For any business that imports raw material, components or machinery, this cuts landed cost directly, and that flows through to pricing, margin and competitiveness.
The three duties being cut
| Duty | Changes in Budget 2026-27 |
|---|---|
| Customs Duty (CD) | Cut on input goods: 20%→15%/10%, 15%/10%→10%/5%, 5%→0% across 92 tariff lines |
| Additional Customs Duty (ACD) | 6%→4% on 449 lines, 4%→2% on 2,107 lines, 2%→0% on 569 lines |
| Regulatory Duty (RD) | Capped at 20% on 359 lines; 20% reduction on the 2.5%–20% band (1,347 lines); 2.5%/2%/1% cut or eliminated on 208 lines |
A worked example
Imagine a manufacturer importing a raw material at a customs value of Rs 1,000,000. Suppose the line previously carried CD of 5% (now reduced toward 0%) and ACD of 4% (now reduced to 2%):
- Old CD at 5% = Rs 50,000; new CD toward 0% = up to Rs 50,000 saved.
- Old ACD at 4% = Rs 40,000; new ACD at 2% = Rs 20,000, saving Rs 20,000.
- Combined potential saving on this single consignment: up to Rs 70,000.
Repeated across an annual import programme, these savings stop being small change and start to matter.
Where the savings concentrate
The cuts are deliberately weighted toward inputs and capital goods. On top of the broad reductions, certain categories are fully exempt: cancer-related APIs, agricultural machinery (CD, ACD and RD) and defence imports. Construction vehicles drop to 10% duty. The policy intent is to lower the cost of production inside the country and make local output more competitive.
What businesses should do now
- Re-cost imports: recalculate landed cost line by line using the new rates.
- Review pricing: decide where to pass savings to customers and where to hold margin.
- Update standard costs: adjust inventory valuation and cost-of-goods assumptions.
- Confirm classification: the benefit depends on correct tariff headings.
Carrying the change in your systems
Lower import costs flow through invoicing, inventory valuation and tax. Sales tax at 18% on goods, plus withholding on onward supplies, must be applied correctly on the new cost base. Zaffre Axon centralises this: Zaffre Tech's platform applies FBR slabs, sales tax and withholding consistently across invoices and finance, configured once and enforced everywhere. The Zaffre HRM module keeps payroll, EOBI and allowance taxability aligned for the teams behind the trade.
Bottom line
Budget 2026-27 lowers import costs across CD, ACD and RD by a real margin. The businesses that gain most will be the ones that re-cost quickly, classify correctly and let a single platform apply the downstream tax rules without error.
References: Finance Act 2026 (Federal Budget 2026-27); Customs Act 1969; Sales Tax Act 1990; National Tariff Policy 2025-30; FBR.
Book a demo of Zaffre Axon to see how Zaffretech keeps import costing, sales tax and withholding compliant through a major tariff reset.