Aluminium waste, auto-parts scrap: Customs classification body imposes 30pc duty

ISLAMABAD: The customs classification committee of the Federal Board of Revenue (FBR) has imposed 30 percent customs duty on the import of aluminium waste and scrap of auto-parts’, and not zero percent duty as claimed by the importer.

The committee has resolved a classification dispute between the customs and the importer through issuance of an order here on Wednesday. According to the FBR’s customs classification committee, the Collectorate of Customs Appraisement, Port Muhammad Bin Qasim, forwarded a reference for determination of appropriate classification of “Aluminium Waste and Scrap of Auto-Parts”.

The Collectorate was of the view that the impugned goods were fragmented pieces of auto-parts, without change in their actual composition, and classifiable under Pakistan Customs Tariff (PCT) Code 7602.0010 (auto-parts). On the other hand, the importer M/s Mughal Iron & Steel Industries Limited, Lahore contended that the impugned goods were ‘Aluminium Scrap in shredded state’ and as the essential character of such article was changed; therefore, correctly classifiable under their declared PCT heading 7602.0090.

The Classification Committee considered the stance of the Collectorate, arguments of importer and perused the available record. Further WeBOC clearance data of waste and scrap of aluminium auto-parts was also scrutinized which showed that the impugned goods are imported, declared/ assessed under PCT Heading 7602.0010.

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In the instant case, the Committee observed that the actual dispute arose due to the physical examination of the goods and their physical attributes, on which the parties have divergent views.

According to the referring Collectorate, the goods are ‘aluminium waste and scrap of auto-parts’ and the physical attributes of the impugned goods had neither been denied nor disputed, and that mere fragmentation of auto-parts into smaller pieces did not change the actual source of the goods. Contrary to it, the importer is of the view their goods are not drawn from waste and scrap of auto-parts; rather it comprises of majority of different articles, including motor vehicles, which lost their essential character during fragmentation/ shredding process.

The Classification Committee observed that the issue mainly and primarily relates to actual description of the goods. However, the Committee decided to proceed to examine the matter with respect to classification of such goods.

In view of the foregoing, the Classification Committee is of the view that the aluminium waste and scrap, identifiable to be comprising of ‘auto-parts’, is classifiable under PCT heading 7602.0010 (auto parts), and in case the source from where the aluminium waste and scrap was drawn is completely unidentified, due to physical nature of such waste and scrap, and the same comprises of a variety of mixed aluminium waste and scrap, predominately of other than auto-parts, then such the aluminium waste and scrap shall fall under PCT heading PCT heading 7602.0090, it added.

Copyright Business Recorder, 2023