Customs approves 5% tariff for base oil

The Nigeria Customs Service (NCS) has clarified the controversial tariff payable on base oil, a major raw material used in the production of lubricants, with a declaration that its duty rate and Value Added Tax (VAT) payable to NCS remained at 5 per cent.

A letter exclusively obtained by Daily Sun and signed by the Deputy Comptroller (Tariff) on behalf of the Comptroller General of Customs, Mr. Isiyaku K., with the subject “Re: 2014 Fiscal Policy Measures” explained that base oil falls correctly under HS Code 2710.1939.90 at 5 per cent duty rate and 5 per cent VAT in tandem with Common External Tariff (CET) 2008-2012 as extended.

The letter dated September 10, 2014, with reference no NCS/HS/27/VOL.VII, was equally copied to Customs Area Controllers (CACs) at Apapa, Tincan Island Port, Lilipond, KLTC, PTML and Onne Port in Rivers State for compliance.

It read in part: “The Service has been inundated with complaints bordering on the clarification of the HS Code and duty rate of base oil. I am directed to inform you that base oil falls correctly under HS Code 2710.1939.90 at 5 per cent duty rate and 5 per cent VAT in tandem with Common External Tariff (CET) 2008-2012 as extended,” the directive stated.

The latest directive by NCS to CACs may have been sequel to a petition by the Lubricants Produce rs Association of Nigeria (LUPAN) to the Coordinating Minister for the Economy/Minister of Finance and the Comptroller General of NCS over the non-implementation of the amended 196 Tariff Lines No 20 H.S Code 2710.193900.

Executive Secretary of LUPAN, Mr. Obidike Emeka, had last month raised the alarm over the failure of NCS across the country to implement an earlier directive by the Ministry of Finance to implement  a 5 per cent duty tariff  earlier approved.

But contrary to the directive, Obidike said it was with shock and disillusionment that LUPAN received information that most Customs commands are in blatant disregard of the directive from the Ministry of Finance.

The 196 Tariff Lines No 20 houses the H.S Code 2710.193900, which is base oil, a major raw material for lubricant manufacturing, which tariff was reduced to 5 per cent from its previous rate of 10 per cent.

Obidike explained that the Minister of Finance, Mrs. Ngozi Okonjo-Iweala, on January 23, 2014, released a circular for the extension of ECOWAS Common External Tariff 2008-2012 alongside the fiscal policy measures for 2014 with all relevant government agencies/parastatals and the NCS notified.

Rather, he said the various commands of NCS are insisting on the payment of the previous tariff of 10 per cent and have gone further, in a bid to enforce their stance, to seal up the silos/tanks of some operators, which include Mobil Oil Nigeria Plc, pending compliance with their demands.

Source : SunOnline

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