FBR imposes 20% customs duty on import of tea whiteners

The Federal Board of Revenue’s (FBR) customs classification committee has decided to impose a 20 percent customs duty on the import of ‘Tea Whiteners’ by leading companies. The decision was issued by the classification committee of the FBR on Thursday.

According to the classification committee, the Inland Revenue Service (IRS) presented 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 claimed that Tea Whiteners are not the product of Chapter 1901 and should be classified under PCT 2106.9090 based on the test report conducted by Deputy Chemical Examiner (DCE), Customs Dry Port Mughalpura, Lahore. The issue was raised by the IRS in the context 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.

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

Both parties agreed that Tea Whiteners are not products of Chapter 04. The manufacturers contended that Tea Whiteners are milk preparations falling under HS Code 1901.9090. However, 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.

The FBR’s classification committee has notified that ‘Tea Whiteners’ are classifiable under PCT heading 2106.9090, as per Chapter II of CGO 12/2002.