NCS/ARS/CL/10233

You have applied for the Tariff Classification of a complete CNG (Compressed Natural Gas) Terminal (Station). 

As contained in your proforma invoice and other supporting document, this product consist of the following components: Pressure Regulating and Metering Skid (PRMS), Dehydration Unit, Compressors, Priority panel, CNG Cascade, Cascade Filling System, CNG dispensers for trucks, CNG dispensers, Recovery Tank, Waste Tank for compressor, Station Control System (SCS), Field Instruments, Electrical Control Cabinet, SCADA & CCTV System, Gas Alarm System and Emergency Cut-off & Alarm System.

PRODUCT ANALYSIS 

The product is a complete Compressed Natural Gas (CNG) terminal station, designed for receiving, conditioning, compressing, storing, and dispensing compressed natural gas (CNG) as vehicle fuel.

A CNG (Compressed Natural Gas) terminal station is an integrated facility designed to receive natural gas from a pipeline, dehydrate and compress it to very high pressures via a compressor, moves into storage tanks (cascades) and dispense it when necessary for use in vehicles (trucks and cars) through a dispenser through a sequential process. 

According to Designing-CNG-Fueling-Station-2014.pdf, there are two types of CNG stations, a Time-Filled (without storage and electronic controls) Station and a Fast-filled (with storage and electronic controls) Station.  However, common to both the time-filled and fast-filled station is the dehydrator and compressor which fulfills the objective of a CNG station, the compression (reduction in size) of natural gas for distribution.

TARIFF CLASSIFICATION

Note 4 to Section XVI states that “Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function.”

Furthermore, the Explanatory Notes to Note 4 of Section XVI (Functional Unit), explains that, ‘the expression “intended to contribute together to a clearly defined function” covers only machines and combinations of machines essential to the performance of the function specific to the functional unit as a whole, and thus excludes machines or appliances fulfilling auxiliary functions and which do not contribute to the function of the whole’. 

You have imported equipment for a Fast-Filled CNG station with a variety of functional units based on the provisions in paragraph 5 above, which retains the principal function of compressing, and dispensing natural gas despite the inclusion of storage tanks and electronic controls.

Accordingly, and in line with the provisions of Note 4 to Section XVI, the CNG station equipment are effectively classified under heading 8414 - “Air or vacuum pumps, air or other gas compressors …” and subheading 8414.80.90.00 - “Other gas compressors not specified…” at 20% duty rate with 7.5% VAT in the ECOWAS Common External Tariff (CET) 2022 -2027. 

Legal Framework and Justification  

GIR 1 and 6