In a recent decision, the Federal Board of Revenue’s (FBR) Customs Classification Committee (CCC) has issued a ruling on the customs duty applicable to the import of “Complete Solar DC Ceiling Fan without blades,” resolving a classification dispute.
According to the CCC, these items will now attract a 20 percent customs duty.
The controversy centered around whether the Solar DC Ceiling Fans were eligible for zero percent customs duty under Pakistan Customs Tariff (PCT) heading number 8501.3100 or should be subjected to a 20 percent duty under PCT heading number 8414.5190.
The CCC, after careful consideration, determined that the fans fall under the latter category, PCT heading 8414.5190, in accordance with General Interpretative Rules (GIR) 1 and 2(a).
The decision came after an analysis of PCT heading 8501, which is reserved for motors used in an array of mechanical and electrical devices, including fans.
However, the CCC concluded that the “Complete Solar DC Ceiling Fan without blades” constitutes the core essence of a fan despite being marketed without blades.
For classification purposes, such products are deemed unfinished fans under heading 8414, thereby warranting the 20 percent duty.
The committee further elaborated that the term ‘essential character’ pertains to products specifically designed to fulfill a distinct function, asserting that even in an incomplete state, items designed for a particular purpose maintain their ‘essential character’.
This principle has been previously applied in the classification of CKD/SKD Kits across various categories, including air conditioners, deep freezers, washing machines, and vehicles, as per budgetary measures ratified by the National Assembly.
The ruling emphasizes that the products in question, presented as “Fan Sets without blades” in retail packaging, should be classified as ‘incomplete Ceiling Fans’ under PCT heading 8414, thereby clarifying the applicable customs duty for importers.
Pakistan customs clarifies that bladeless ceiling fans, though sold without blades, are unfinished fans and will be taxed at 20% duty, aligning with similar appliance kits. This brings clarity for importers and ensures fair duty collection.