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A company requested clarification on whether all components of a self-adhesive label (front material, adhesive, silicone, and backing) are exempt from tax. The DGT ruled that only the front material and adhesive are exempt, whereas the silicone layer and backing are subject to tax if they consist of non-reusable plastic.
Companies manufacturing or importing self-adhesive labels must account for the taxability of all plastic components, including the silicone layer and the backing material, rather than assuming the entire label is exempt.
The tax team reviews your specific situation.
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