Islamabad, Dec 30: The Customs Classification Committee of the Federal Board of Revenue (FBR) has ruled in favor of a multinational beverage company regarding the classification of “Kola Vanilla Extract,” a flavoring agent and preservative used in beverage production. The Committee determined that the extract is properly classified under Pakistan Customs Tariff (PCT) Heading 2106.9010, based on its characteristics and intended use.
This decision followed a valuation ruling issued by the Committee. The case originated when the Collectorate of Customs (Appraisement) Islamabad referred the classification of “Kola Van,” imported by Pepsi Cola International, for determination. Initially, the importer sought clearance under PCT Heading 1302.1900. However, the Directorate General of Audit (Customs & Petroleum) Lahore raised an objection during an audit, asserting that such substances should fall under PCT Heading 3302.1010, subject to a 10% customs duty and 50% federal excise duty.
Audit findings argued that “Kola Van,” containing natural saponins, sugar, glycerin, and ethanol, is a flavoring agent and odoriferous substance, thus qualifying under PCT Heading 3302.1010. References to prior clearances under this heading supported their claim. The case was referred to the Adjudication Collectorate, which ruled in favor of the department. The importer subsequently appealed to the Appellate Tribunal, which directed the matter to the Classification Center in Karachi.
After examining the product’s composition and application, the Classification Committee concluded that “Kola Vanilla Extract” is not a raw extract under Chapter 13.02. The analysis applied General Interpretative Rules (GIR) 1 and 3(b), which consider the product’s essential character—its use as a concentrate for aerated beverages. Chapter Notes to 13 and 33 further exclude the product from raw extracts, reinforcing its classification under PCT Heading 2106.9010. The Committee’s ruling confirmed the classification based on these findings.
