FBR’s Customs Committee Slaps 20% Duty on Import of Tea Whiteners

The customs classification committee of the Federal Board of Revenue (FBR) has imposed 20 percent customs duty on the import of ‘Tea Whiteners’ by leading companies.

In this regard, the FBR’s classification committee has issued a ruling on Thursday.

The classification committee’s decision revealed that the Inland Revenue Service (IRS) made a representation before Member Customs (Operation) challenging the earlier classification ruling of Tea Whiteners of Brand names, Tea Max, classified under PCT heading 1901.9090.

The IRS authorities contended that according to Test Report conducted by Deputy Chemical Examiner (DCE), Customs Dry Port Mughalpura, Lahore, the Tea Whiteners are not the product of Chapter 1901 and should be classified under PCT 2106.9090. The issue was raised by the IRS in the backdrop of the admissibility of zero rating & exemption under 5t & 6th Schedule of the Sales Tax Act, 1990 on Tea Whiteners of various brands being manufactured locally in Pakistan.

Subsequent proceedings initiated by the IRS based on the Test Report were challenged by the manufacturers on the basis that the Classification Committee has already issued Classification Ruling for Tea Whiteners. The Board referred the representation to the Classification Committee for its views/comments.

It is an undisputed position that Tea Whiteners are not the products of Chapter 04. This aspect is accepted by the manufacturers as well. The manufacturers argued that tea whiteners are milk preparations falling under HS Code 1901.9090.

On the other hand, the IRS representatives argued that tea whiteners are neither natural milk nor milk preparations of HS Code 1901.9090. Instead, tea whiteners are food preparations of Chapter 21 subheading 21.06 falling under HS Code 2106.9090.

Accordingly, ‘Tea Whiteners’ are notified in terms of Chapter II of CGO 12/2002 to be classifiable under PCT heading 2106.9090, FBR’s classification committee added.