KARACHI: MCC Appraisement East has issued an assessment alert and all assessing officers are directed to observe due diligence in classification while assessing varnishes and polyester polyamide wire enamel/varnishes.
The R&D of MCC Appraisement East observed that while assessing Varnishes and Polyester Polyamide Wire Enamel, due care is not being exercised in classification thereof which results in evasion/short recovery of Customs Duty and allied taxes, as classification is composition specific of these products and ultimately affects applicable rate of duty.
According to scheme of tariff under chapter 32.08, these products if based on “Polyester” are classifiable under PCT heading 3208.1010 and 3208.1090 attracting Customs Duty 20%, while if based on acrylic or vinyl polymers the same are classifiable under PCT heading 3208.2010 and 3208.2090 attracting Customs Duty 20%. However if the same are based on Polyamides correct classification PCT heading 3208.9011 and 3208.9019 where customs Duty is chargeable at reduced rate of 11%.
On scrutiny of clearance data, it has been observed that in a number of cases goods are being declared as based on Polyester Polyamides or Polyamide Polyester under incorrect declared PCT heading 3208.9019 attracts Customs Duty 11%.
In view of above, all assessing officers are directed to observe due diligence in classification while assessing the subject goods which require determination of actual base component of the imported item and is subject to chapter note 4 of said chapter.
If the declaration is made compositely as base on “Polyester Polyamides” or “Polyamide Polyester”, the same shall be classified under PCT heading 3208.9090 and if the same are singularly based on “Polyester” the same shall be classified under PCT 3208.1010 or 3208.1090 in accordance with the description.