NCS/ARS/CL/10447

You have requested for a binding tariff information for a Non-Associated Gas (NAG) Module to be integrated on the FPSO Abigail-Joseph for the OML 83/85 development whether it arrives assembled or in several consignments.

PRODUCT ANALYSIS

The NAG Module consists of the following components with their functions below:

According to the documents you provided, the module takes raw, wet NAG from source, removes liquids, solids and water vapour, then compresses and meters the gas so that it meets the export specification for delivery to NLNG.

TARIFF CLASSIFICATION ANALYSIS AND CONCLUSION

The goods are products of Section XVI, Chapter 84, consisting of machinery and mechanical apparatus such as separators, contactors, compressors, heat exchangers and meters.

Additionally, they consist of a combination of separate machines, each on its own skid, joined by process piping, cabling and a common control system as described in Note 4 to section XVI:  

‘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’

The process flow provided in the brochure shows that these separate machines contribute together to one clearly defined function which is the purification of raw NAG made fit for export by removing liquids, solids and water vapour, compressing the gas and delivering it at export conditions. That function is clearly covered by heading 84.21. Additionally, the export specification is a purity specification with maximum water content and hydrocarbon dew point as test parameters.

Accordingly, the NAG Module is appropriately classified in HS Code 8421, ‘Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases', and effectively classified in tariff heading 8421.39.90.00, ‘Other Filtering or purifying machinery and apparatus for gases not specified’, at 5% rate of duty and 0% VAT in line with the provisions of the ECOWAS CET 2022 -2027.

Legal Framework & Justification

GIRs 1 & 6 

Note 3 to Section XVI

*GIR 2a applies (if the machinery will be imported disassembled based on the details in the documents provided)