Acrylic Polymer in Primary Form, water-based coatings to be classified under PCT 3209.1000

KARACHI: The Pakistan Customs Tariff (PCT) Committee has decided that classification of ‘Acrylic Polymer in Primary Form-370’ and similar other categories of water based coating for printing industries having similar characteristics will be made under PCT heading 3209.1010. The decision would soon be made public.

According to details, the classification of the above mentioned product came up for discussion in the PCT Committee as the importers were arguing that the product fall under PCT 3906. The importer argued that in terms heading 39.06 to the Explanatory Notes to the Harmonized Commodity & Coding System, the product is clearly classifiable there under. The importer maintained that MSDS confirmed that the product is a water based styrene acrylate polymer dispersion therefore the impugned goods would be classified as acrylic polymer in primary form.

It was argued that the product paint and varnish as indicated under HS Code 3209 covers dispersion or solution of binder based on synthetic polymers in an aqueous medium blended with dispersions of in soluble coloring matter and fillers. Varnishes are similar to paints except that they do not contain pigment. Moreover, varnishes contains added substances other than those necessary for the manufacture of products specified in Heading 3901 to 3913 such as anti-skinning agents and certain thixotropic or drying agents which make them suitable for use solely as varnishes.

These ingredients are known as secondary ingredients and are essential for making varnishes. It was further argued that the impugned goods are polymer in primary form and do not contain such ingredients which render the product to be water based varnishes of PCT Heading 3209.1010.

The importer argued that the Collectorate wrongly considered the product as varnishes and its contention is contrary to the Explanatory Notes to the Harmonized System. Customs was of the view that goods are not of heading 39.06 and aqueous emulsions of Acrylic Polymer in liquid form come under the purview Heading 3906 being primary form of Acrylic resin, provided that it does not contain any other added substances apart from permitted additions to the products such as fillers, plasticizers, solvents, pigments, emulsifiers/stabilizer etc.

The PCT Committee headed by Zaiba Bashir observed that Heading 39.06 covers, inter-alia, product e.g. Acrylic Polymers in Primary Form with the addition of permissible additives as elaborated under the term, “Primary Forms” in the General Explanatory Notes to Chapter-39. However, when as a result of the addition of certain substances, the resultant product answer to the description in more specific heading elsewhere in the Nomenclature, they are excluded from the purview of Chapter-39. It observed that the representatives of the importer have raised a number of points related in support of their arguments and challenging the contention of the group but it is required to understand the impact of various additives and the character its imparts to various polymers.

Their argument is correct that various additives can be added to give the character of fast drying, good gloss, good scratch and scuff resistance, one sided coating, block resistant etc to the polymers but it is observed that these characters do not make the polymers eligible for classification in Chapter other than 39. However, if nature of the additive is such that it imparts some specific character to the polymer and by virtue of which a specific PCT Heading is available in the Pakistan Customs Tariff then it is required to classify such product in that specific HS Code by ignoring chapter 39.

The Committee unanimously concluded that the referred product complies with the description given in heading 32.09. As such attract classification under sub-heading 1000 of 32.09. Sources said that Collector Appraisement East, Najeeb Abbasi had been instrumental in eliminating under-invoicing, mis-declaration and mis-classification of tariff, this securing the national revenue. The PCT Committee decision would eliminate mis-classification of the said products and revenue leakage would be plugged.

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