The Caribbean Court of Justice (CCJ) Wednesday said that the regional tax payable a Barbados-based company on “other hydraulic cemented” imported into the island from Portugal and Turkey, should be five per cent in keeping with the guidelines within the Common External Tariff (CET).
The Trinidad-based CCJ, which also serves as an international tribunal interpreting the Revised Treaty of Chaguaramas that governs the regional integration movement, CARICOM, delivered its ruling after hearing arguments in the case of the Trinidad Cement Limited (TCL) and its Barbados-based business unit, Arawak Cement Limited, against the state of Barbados and Rock Hard Cement Limited versus the state of Barbados and the Caribbean Community (CARICOM).
The CCJ heard that in 2001, CARICOM’s Council for Trade and Economic Development (COTED) granted Barbados an exemption, in respect of the regional CET of zero to five per cent, so that the state could apply taxes of 60 per cent to categories of cement described as ‘other hydraulic cement’.
The regional tariff is intended to offer goods produced and distributed in the region an advantage over imported ones. In 2015, Barbados decided to return to the CET and apply a five per cent tax on the ‘other hydraulic cement’ imported by Rock Hard Cement Limited.
But in its ruling, the CCJ decided that where COTED allowed a member state to charge taxes higher than the regional tariff on the importation of good from outside the region, there was no need for the member state to obtain approval from COTED to revert to the CET.
However, in these circumstances, the member state should give reasonable notice of its intention of returning to the regional tariff.
The Court said that this notice would ensure that regional businesses enjoy transparency, certainty, and predictability of tax structures.
The CCJ said that this was “reflective of good administrative practices, preserved the sovereign autonomy of the Member State and ultimately enhanced the overall functioning of the CARICOM Single Market and Economy (CSME,” which allows for the free movement of goods, skills, labour and services across the region.
The Court also found that the regional manufacturers of cement, who had brought the action against Barbados, had notice for several years of the intention of Barbados to revert to the regional tariff and therefore could not succeed in their action.