FBR’s Customs Committee Imposes Sales Tax on Imported Textbooks, Literary Works and Much More

The Customs Classification Committee of the Federal Board of Revenue (FBR) has imposed a sales tax on the import of printed brochures, pamphlets and leaflets, literary works, textbooks, telephone directories, yellow pages and technical publications etc.

In this regard, the classification committee issued a ruling on Thursday.

The Classification Committee observed that the issue primarily and mainly related to the exemption of sales tax in terms of S.No.32 of the Table-1 of the Sixth Schedule to the Sales Tax Act, 1990,

The ruling revealed that the Collectorate of Customs, Islamabad forwarded a reference for the classification of ‘Printed Matters/Documents, Personal Letters/Certificates/ Forms/Degrees/Theses of Student, etc’. Brief facts of the case as reported by the referring Collectorate are that Audit Authorities vide DP-3331 for the period 2014-15 observed that M/s DHL Pakistan (Pvt) Limited imported consignments of ‘other printed materials’ through their courier companies and got cleared the same under PCT heading 4911.9900 without payment of sales tax, availing exemption of S.No.32 of the Sixth Schedule to the Sales tax Act, 1990.

On the other hand, the goods were classifiable under PCT heading 4901.9990, attracting 10 percent customs duty with no exemption of sales tax. In the light of the draft paras, demand notices were issued and thereafter cases were adjudicated in favour of the department. The importer being aggrieved filed an appeal before the Customs Appellate Tribunal, Islamabad.

The Customs Appellate Tribunal, Islamabad directed the collectorate to refer the matter to Classification Centre for seeking guidance on whether the subject items fall under PCT heading 4901 or 4911. Accordingly, this reference was forwarded to Classification Centre.

Several hearings in the case were held and lastly on 17.02.2023. The meetings were attended by representatives of the Collectorate of Customs, Islamabad and members of the Classification Committee. The departmental representative reiterated the stance of the Collectorate/audit authorities that the under-reference subject goods were correctly classified under PCT heading 4901.9990.

On the other side, the representatives of the importer contended that their declared PCT heading was correct as the same covered printed matters, in terms of (GIR Rule 3). The Classification Committee observed that as per Explanatory Notes publications and printed reading matters are covered under HS Code 49.01. These include printed books, brochures, pamphlets, leaflets and similar printed matter whether or not in single sheets.

They include literary works of all kinds, text-books, technical publications, books of reference such as dictionaries, encyclopaedias and directories like telephone directories, yellow pages, catalogues for museums and public libraries, liturgical books such as prayer books, shorter scientific theses and monographs, instruction notices, etc., issued by government departments or other bodies, tracts, hymn sheets, textual matter in the form of sheets for binding in loose-leaf binders, etc.

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