The Federal Board of Revenue (FBR) Customs classification committee has ruled that the import of “Sodium Naphthalene Sulphate FDN-A,”
a raw material used in making different chemicals in the local markets of Pakistan, should only be subject to a 3 percent customs duty at the import stage, not the 16 percent duty imposed by the Collectorate of Customs (Appraisement) East.
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The Collectorate had forwarded a reference for the determination of the classification of the item, which was declared to be under PCT heading 3824.9999, but was found to be a superplasticizer used as a concrete admixture.
The importers contended that the goods were raw materials used in making different chemicals for customers in the local market of Pakistan, and the Incharge Custom House Lab opined that the impugned goods were not prepared additives and could not be classified as such under PCT heading 3824.4000.
The FBR’s Customs classification committee rejected the Collectorate’s view and ruled that the raw material should only be subject to a 3 percent customs duty at the import stage.
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Brief facts as reported by the referring Collectorate are that M/s Vertex Chemicals (Pvt) Ltd. Imported a consignment declared to contain “Sodium Naphthalene Sulphate FDN-A” under PCT heading 3824.9999.
On Lab Test, the goods were reported as sodium salts of naphthalene sulfonateformaldehyde condensate product in form of dark brown powder. During scrutiny, the Collectorate found that Sodium Naphthalene Sulphate FDN-A is directly used as superplasticizer and used as concrete admixture, which is classifiable under Head 3824.4000.
Another company M/s Ultra Construction Chemicals (Pvt) Ltd filed complaint before the Federal Tax Ombudsman for ascertainment of classification.
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The customs Collectorate stance was the impugned goods are superplasticizer for concrete or concrete admixture which were correctly classifiable under PCT heading 3824.4000 as “Prepared additive” by application of GIR Rule 3(a). However, the importers’ representatives argued that the goods were actually raw materials used as concrete admixtures and in the production of different chemicals for customers in the local market of Pakistan.
To further investigate the matter, the Incharge Custom House Lab was consulted, who opined that the goods were not prepared additives. It was also noted that this issue of classification had arisen in the past, and the Collectorate had previously classified the goods under PCT heading 3824.9999.
Additionally, the current and past clearance history indicated that the goods were released under PCT heading 3824.9999. Moreover, the opinion of the Custom House Lab further supported the argument that the goods could not be classified as prepared additives under PCT heading 3824.4000.
