Is advance tax charged on registering an imported or reconditioned car if tax was already paid at import?

An imported car can meet income tax at two points: at the port, when Customs collects advance tax under section 148, and at the Excise and Taxation office, when the car is first registered under section 231B(1). Section 231B(4) of the Income Tax Ordinance, 2001, as amended to 30 June 2026, decides whether both apply. The rates discussed here are those for tax year 2027.

What does the law say?

Section 148(1) requires the Collector of Customs to collect advance tax from every importer of goods on the value of the goods, at the rate in Part II of the First Schedule. Section 148(5) says it is collected in the same manner and at the same time as customs duty.

Section 231B(1) separately requires the registering authority of the Excise and Taxation Department to collect advance tax when a motor vehicle is registered, at the rates in Division VII of Part IV of the First Schedule.

Section 231B(4) links the two. Sub-section (1) does not apply if a person produces evidence that tax under section 148 was collected from the same person in respect of the same imported vehicle. The sub-section draws no distinction between a new and a used imported car, so it reads the same for a reconditioned vehicle.

How is the registration tax worked out when it does apply?

The rate is a percentage of value by engine capacity, from clause (1) of Division VII:

Engine capacity	Rate of tax
Up to 850cc	0.5% of the value
851cc to 1000cc	1% of the value
1001cc to 1300cc	1.5% of the value
1301cc to 1600cc	2% of the value
1601cc to 1800cc	3% of the value
1801cc to 2000cc	5% of the value
2001cc to 2500cc	7% of the value
2501cc to 3000cc	9% of the value
Above 3000cc	12% of the value

For a vehicle imported into Pakistan, the first proviso to clause (1) makes the value the import value assessed by the Customs authorities, increased by customs duty, federal excise duty and sales tax payable at import stage. It is not the price paid to a showroom.

Where engine capacity is not applicable and the value is Rs. 5 million or more, the second proviso sets 3% of the import value increased by customs duty, sales tax and federal excise duty.

Worked example (illustrative figures)

Case 1: the importer registers. Sana in Islamabad imports a used 1,798cc SUV in her own name. Customs assesses the import value at Rs. 4,000,000, and customs duty, federal excise duty and sales tax at import come to Rs. 3,500,000. Tax under section 148 is collected from her at import.

1. At registration she produces evidence that section 148 tax was collected from her for this vehicle.
2. Section 231B(4) applies, so the registration collection under section 231B(1) is nil.

Case 2: a showroom buyer registers. Kamran in Lahore buys an identical SUV that a Lahore showroom imported in its own name. Section 148 tax was collected from the showroom, not from Kamran. He appears in the active taxpayers’ list.

1. Section 231B(4) does not apply, because the tax was not collected from the same person.
2. Value under the first proviso: Rs. 4,000,000 + Rs. 3,500,000 = Rs. 7,500,000.
3. Engine band: 1601cc to 1800cc, so the rate is 3%.
4. Tax under section 231B(1): Rs. 7,500,000 x 3% = Rs. 225,000.

If Kamran did not appear in the active taxpayers’ list, the first proviso to rule 1 of the Tenth Schedule increases tax under section 231B by two hundred percent of the First Schedule rate. The 3% rate becomes 9%, and Rs. 7,500,000 x 9% = Rs. 675,000.

What if the car was imported under a gift or baggage scheme?

This page does not cover the customs schemes under which personal vehicles are brought into Pakistan, or any SRO that governs them; those are outside this corpus. For income tax, the test in section 231B(4) stays the same: was tax under section 148 collected from the person now registering, for this vehicle? If a car is imported in one family member’s name and registered in another’s, the text does not treat them as the same person.

Is section 148 tax treated the same way as section 231B tax?

Not in the wording. Section 231B(5) says tax collected under section 231B is adjustable. Section 148(7) describes tax collected under section 148 as minimum tax on the income of the importer arising from the imports, with an exception for an industrial undertaking importing for its own use. The Ordinance does not spell out how that description applies to a private individual importing one car for personal use, and this page does not resolve it. The section 148 rates for vehicles depend on the Part II rates and the Twelfth Schedule classification, which this page does not reproduce.

Common mistakes

• Using the showroom price as the value. Division VII uses the Customs-assessed import value plus import-stage duties and taxes for an imported vehicle.
• Relying on someone else’s import documents. Section 231B(4) requires collection from the same person.
• Assuming a used car is outside section 231B. The five-year cut-off in the proviso to section 231B(1) runs from the “date of first registration” defined in section 231B(6). For a vehicle not previously registered by the Excise and Taxation Department, clause (d) points to that first registration, so a car imported used is not excused merely by its age.

What to check in the official text

Read section 231B(1), (4), (5) and (6), section 148(1), (5) and (7), and clause (1) of Division VII of Part IV of the First Schedule with both provisos. Customs valuation rules, import schemes for personal vehicles and provincial registration charges are outside this corpus.