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FBR Rejects Importer’s Plea, Imposes 20% Customs Duty on “CDM MAS CRUMBS”

The Federal Board of Revenue (FBR) has taken a firm stance against a leading importer of dairy products, refusing their claim of a lower duty rate on the import of “CDM MAS CRUMBS.” Instead, the FBR has imposed a 20% customs duty on this item, following a ruling issued by the customs classification committee on Monday.

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Initially, the importer sought to benefit from an 11% duty rate under the Pakistan Customs Tariff (PCT) Heading 1806.2020. However, the FBR’s committee determined that the item falls under PCT heading 1901.9090, which is subject to a higher 20% customs duty.

The decision came after credible information indicated that the importer, M/s Mondelez Pakistan, was erroneously clearing “CDM MAS CRUMBS” under a lower tariff heading. Subsequent lab tests revealed that the product is classifiable under the heading 1901.9090, prompting the FBR to take action.

Despite the importer’s petition for provisional release in the Sindh High Court, subsequent consignments of similar items were blocked, pending further clarification. The matter was then referred to the Classification Committee for a thorough determination.

The committee concluded that the goods are a milk-based complex mixture, as indicated by the manufacturer’s description of “CDM MAS Crumbs,” with CDM standing for “Cadbury Dairy Milk.” This assertion, along with lab reports and product composition, led to the classification under PCT heading 1901.9090.

The importer argued for classification under PCT heading 1806.2020 as sugar confectionery, but this claim was refuted based on the product’s composition and characteristics. With a cocoa mass percentage of only 3.77%, the goods did not meet the criteria for either category, reinforcing the classification under the heading 1901.9090.

In light of these findings, the FBR’s committee affirmed the imposition of a 20% customs duty on “CDM MAS CRUMBS,” emphasizing the importance of accurate classification based on product attributes and guidelines provided in the Explanatory Notes.

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This decision underscores the FBR’s commitment to ensuring compliance with tariff regulations and maintaining fairness in import duties, ultimately safeguarding the interests of the national revenue system.

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