ISLAMABAD: 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.

The FBR’s classification committee issued a ruling on Thursday after hearing viewpoint of all stakeholders.

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 product of Chapter 1901 and should be classified under PCT 2106.9090.

Rs16bn Sales Tax Evaded by Tea Whitener Manufacturers

The issue was raised by the IRS in the backdrop of admissibility of zero rating and exemption under 5th & 6th Schedule of 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.

The committee observed that 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 the Customs General Order (CGO) 12/2002 to be classifiable under PCT heading 2106.90900, FBR’s classification committee added.

Copyright Business Recorder, 2023


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Muhammad Ali Apr 14, 2023 09:08am
100% duty should be on non essential items like tea whiteners.
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Tulukan Mairandi Apr 14, 2023 11:58am
How about for Tea itself? Tea is not an essential
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Mushtaque Ahmed Apr 14, 2023 09:47pm
Tea whitener is not a dairy product. Typically, tea-whiteners are composed of vegetable fats, protein (sodium caseinate/ soy protein isolate), carbohydrates (sugar, maltodextrin or corn syrup) along with emulsifiers, stabilizers and other food additives.
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