ISLAMABAD — The Federal Board of Revenue (FBR) has classified coated fabric and artificial leather as textile products for customs purposes, a move aimed at resolving long-standing confusion among importers and ensuring uniform duty assessment across Pakistan. The decision is expected to streamline import procedures and reduce disputes at ports, where similar consignments had previously been categorized inconsistently.
According to a document available with Wealth Pakistan, the ruling was issued by the Customs Classification Committee through Public Notice No. 03/2026 dated March 10, 2026. The matter was initially raised with the Office of the Chief Collector of Customs (Appraisement), South Karachi, on December 16, 2025, after traders reported that identical goods were being classified differently at various customs stations.
Background of the classification dispute
Prior to the decision, some consignments of coated fabric and artificial leather were cleared under the plastics category, while others were treated as textile goods. This inconsistency led to delays in clearance and uncertainty regarding the applicable customs duties and taxes, as classification directly determines the tariff rate.
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Officials stated that the new classification will ensure a standardized approach across all customs stations, enabling smoother clearance of goods and greater predictability for businesses involved in the import of these materials.
What are coated fabric and artificial leather?
Coated fabric refers to conventional textile material that has been covered with a thin layer of polyurethane (PU). This coating enhances durability, water resistance, and provides a leather-like finish. Such materials are widely used in the manufacturing of products including footwear, handbags, furniture upholstery, and automobile seat covers.
The committee clarified that PU-coated fabric will now be treated as a textile product for customs classification and duty purposes. Consequently, artificial leather produced from this material will also fall under the textile category rather than being classified as a plastic item.
Impact on businesses and trade
The decision is expected to bring clarity and consistency to the import process, benefiting traders and manufacturers who rely on coated fabrics and artificial leather. By eliminating ambiguity in classification, the FBR aims to reduce clearance delays, minimize disputes, and ensure transparent application of customs regulations.
Industry stakeholders anticipate that the standardized classification will facilitate smoother trade operations and improve compliance with customs procedures across Pakistan.
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