Tax Appeals Tribunal Victories on Tariff Classification of In-mould Plastic Labels
Written by Sharon Olbara & Sharon Chepkwony
TAX & CUSTOMS
MEMA Advocates LLP successfully represented Sanpac Africa Limited (TATC E1382 of 2025), Silafrica Kenya Limited (TATC E921 of 2025) and Ashut Plastics Limited (TATC E1002 of 2025) in three separate appeals before the Tax Appeals Tribunal (TAT) concerning the tariff classification of imported in-mould printed plastic labels used in the manufacture of plastic packaging products.
The Tribunal's decisions provide important judicial guidance on the tariff treatment of printed plastic packaging components under the East African Community Common External Tariff (EAC CET) and offer welcome clarity for manufacturers and importers within the packaging industry. The judgments affirm that in-mould printed labels used for product identification and compliance with statutory labelling requirements do not constitute trade advertising materials for customs purposes.
BACKGROUND
TThe three taxpayers are manufacturers of high-quality rigid and flexible plastic packaging products supplied to fast-moving consumer goods (FMCG) companies and other businesses across East and Central Africa. As part of their manufacturing processes, they import in-mould printed plastic labels that are permanently fused into plastic containers during production.
The imported labels contain essential product information, including product names, ingredients, nutritional information, manufacturer details, trademarks, logos and volume declarations. They also facilitate compliance with statutory labelling requirements applicable to pre-packaged goods in Kenya.
The disputes arose after the Kenya Revenue Authority (KRA) reclassified the imported labels under HS Code 4911.10.00 as "trade advertising material", attracting import duty at 35%. The taxpayers challenged the classification, maintaining that the labels are manufacturing inputs used primarily for product identification, traceability and compliance purposes.
The Key Issues Before the Tribunal
The central question in all three appeals was whether the imported labels should properly be classified as:
Trade advertising material under HS Code 4911.10.00;
Other printed matter under HS Code 4911.99.90; or
Plastic film products under Chapter 39 of the EAC CET.
The taxpayers argued that:
The labels are integral components of plastic packaging products and are permanently incorporated into the finished packaging during the manufacturing process.
The information appearing on the labels is required for product identification and compliance with statutory labelling requirements and is not promotional in nature.
The presence of trademarks, logos and branding elements does not automatically render a product "trade advertising material".
The labels are intended to communicate product-specific information to consumers rather than to advertise or promote products.
THE TRIBUNAL’S ANALYSIS
In determining the dispute, the Tribunal considered the General Interpretative Rules for the Classification of Goods (GIRs), particularly GIR 1 and GIR 6, together with Note 2 to Section VII of the EAC CET, which provides that printed plastic articles whose printing is not merely subsidiary to their primary use are classified under Chapter 49 rather than Chapter 39.
After reviewing the product samples, specifications, photographs and other evidence produced before it, the Tribunal found that the printing on the labels was not merely incidental. Rather, the printed content gave the labels their essential character, as it was the very reason the labels were manufactured and incorporated into the packaging.
The Tribunal further recognised that while the labels contained branding elements, trademarks and logos, their principal purpose was to identify products and communicate information required by law and commercial practice. They were not intended to promote or advertise products in the manner contemplated under Heading 49.11 relating to trade advertising material.
Importantly, the Tribunal distinguished between goods intended to identify products and those intended to promote products. It observed that trade advertising materials are generally printed matter designed to market goods or influence consumer purchasing decisions. By contrast, the imported labels are permanently incorporated into packaging and are principally used for product identification, traceability and compliance with statutory labelling requirements, including Rule 7 of the Weights and Measures (Sale and Labelling of Goods) Rules.
THE TRIBUNAL’S DECISION
The Tribunal held that:
The imported labels are properly classified under Chapter 49 because the printed content is not merely incidental to their primary use.
The labels do not constitute trade advertising material under HS Code 4911.10.00.
The appropriate tariff classification is HS Code 4911.99.90 ("Other printed matter").
Consequently, the Tribunal allowed all three appeals and set aside KRA's review decisions. In the Sanpac Africa Limited matter, the Tribunal further ordered KRA to refund the taxes paid pursuant to the impugned classification.
SIGNIFICANCE OF THE DECISIONS
These decisions are significant for manufacturers and importers that rely on in-mould labels and similar printed packaging components. They provide much-needed judicial guidance on the proper approach to tariff classification where printed plastic articles perform packaging and product identification functions.
The judgments confirm that the presence of trademarks, logos and product information on packaging materials does not, by itself, render such goods trade advertising material. Instead, tariff classification must be determined by considering the essential character and principal purpose of the imported goods.
The decisions also underscore the importance of Note 2 to Section VII of the EAC CET in classifying printed plastic articles and clarify the distinction between printed matter used for product identification and compliance with statutory or regulatory requirements, and printed materials whose primary purpose is advertising or promotion.
For the packaging and manufacturing industries, the Tribunal's decisions provide welcome certainty on the customs treatment of in-mould printed labels that are permanently incorporated into finished packaging products.
HOW WE CAN HELP
Customs disputes can have significant financial and operational implications for businesses. Whether you are seeking guidance on tariff classification, customs valuation, exemptions and incentives, or are facing an audit or dispute with the Kenya Revenue Authority, MEMA Advocates LLP has the expertise to help.
Our team combines technical customs knowledge with practical industry experience to deliver strategic and commercially focused solutions.
For more information on how we can assist your business, please contact us at info@memaadvocatesllp.com.
