Law: Sales Tax Act, 1990

Section: 38B,item85 ofthe6th Schedule

THIS JUDGMENT DELIVERED BY: AYESHA A. MALIK JUSTICE:---.--- This judgment decides upon the issues raised in WP Nos. 71500/17, 74282/17, 74285/17, 74774/17 and 78500/17 as all the petitions raise common questions of law and facts. 2. Through these petitions, the Petitioners have challenged the determination dated 25.5.2017 issued by the Deputy Chemical Examiner, Lahore ("DCE") with reference to the PCT classification for Tea Whitener ("TW") and letter dated 15.8.2017 issued, by the Respondent Federal Board of Revenue ("FBR") seeking recovery of sales tax consequent to the determination by the DCE on 25-5-2017. 3. The common facts of the case are that the Petitioner in WP No.71500/17 produces TW under the brand name 'Tea Whitener'. The Petitioner in WP No. 74774/17 produces the TW under the brand name 'Qudrat' and 'Chaika'. The Petitioner in WP Nos. 74282/17 and 74285/17 manufactures liquid TW sold also under the brand name 'Qudrat' and 'Chaika'. The Petitioner in WP No. 74282/2017 and 74285/2017 manufactures various products including liquid TW sold under the brand name 'Tea Max'. On 5.5.2011 Collector, Model Customs Collectorate of Appraisement, Custom House, Karachi, considered the case of TW produced by the Petitioner in WP Nos.74282/17 and 74285/15 and held that the classifiable PCT heading is 1901 and that PCT heading 2106 was not applicable to TW. Consequently TW fell under PCT heading 1901.9090 and was under the zero rated regime as per item 85 of the 6th schedule of the Sales Tax Act, 1990. On 25.5.2017 DCE examined the "Dostea" TW and found that it contained an aqueous food preparation consisting upon Vegetable Fat, carbohydrates, Protein, trace amount of minerals, emulsifier and stabilizing agent derived from guar gum for maintain its viscosities. It is milky white thin emulsion stated to be used as tea mix for enhancing its taste and quality. Such food preparations which are used to enhance taste and Quality of food are appropriately classifiable U/Heading 2106.9090 of PCT in our opinion which may further be verified by the concerned authority in the light of HS Motes as per specific use of the product. On the basis of this finding the DCE was of the…

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