KARACHI: The Customs Classification Centre has determined the tariff classification of PV/PU materials (artificial leather) manufactured by M/s ATS Synthetics and M/s AHN Synthetics under PCT Code 39.21.

The tariff classification of subject goods were made under PCT 39.21 in May 2013 but on a representation made by the said manufacturers, the Federal Board of Revenue (FBR) directed the Classification Committee to re-examine its findings after giving proper opportunity of hearing to the applicants and laboratory testing of the goods.

The representatives of manufacturers, assailed the previous findings of Classification Committee regarding the classification of the subject goods and pleaded that PVC coated fabric having both compact cellular plastic layers, especially when the compact layer is the top layer, is classifiable in PCT Heading 59.03.

They maintained that US Customs have classified the subject goods under HS Code 59.03 and identical/similar products are routinely cleared by Customs under HS Code 59.03.

The LTU Lahore argued that the subject goods were classifiable under PCT Code 39.21 as by virtue of Explanatory notes on HS code 59.03 and Note 2(a)(5) of Chapter 59, the goods in question are excluded from the purview of Chapter 59 and are classifiable under Chapter 39.

The essential character of the goods is of plastics and various international manufactures of PVC/PU leather and artificial leather declare the HS Code of their goods in 39.21 on their websites.

The arguments put forth by the stakeholders, test reports of leather research centre, PCSIR and relevant explanatory/section/chapter notes of tariff were examined by the Committee and it was concluded that PVC/PU materials (artificial leather) manufactured by M/s ATS Synthetics and M/s AHN Synthetics is classifiable under PCT Code 39.21.