View Full Version : Nation Loses Millions Over Misclassification Of Imported Cement

Pope Bitterz D'Alomo
28th August 2011, 04:02 AM
The Tariff Advisory Board of the Ministry of Trade and Industry has commenced investigations into an allegation that the nation loses millions of Ghana cedis as a result of erroneous concessionary duty rate on the importation of finished bulk cement by a Nigeria-based company.

Greenview International Company Limited is alleged to have imported about 265,000 tonnes of finished cement into the country by the end of 2010, which should have attracted 20 per cent import duty equivalent to about GH˘6.9 million excluding VAT, NHIL and other levies, and not five per cent concessionary rate it paid that amounted to the equivalent of about GH˘1.7 million.

The Tariff Advisory Board, which has the powers of a High Court, is expected to present a report on its findings to the Vice-President soon, 18 months after GHACEM and Diamond Cement had made the allegation against Greenview International Company Limited in a petition to the Finance and Trade ministers.

The acting Director (Imports and Exports) of the Ministry of Trade and Industry, Mr Appiah Donyina, however, told the Daily Graphic that due diligence was required to address the matter.

He said a subcommittee of the Tariff Advisory Board had visited the premises of Greenview to acquaint itself with the operations of the company.

He would not be pushed into giving a hint on when the board would conclude its work, explaining that it was important to thoroughly address the issues raised by the petitioners to ensure fairness to all the parties involved.

Mr Donyina said the board was currently handling other issues in respect of some other imported items apart from the Greenview cement.

The two local cement companies alleged in a joint petition that although Greenview International Company Limited imported finished cement, the product was misclassified as raw materials under the label GRAY ORDINARY PORTLAND CEMENT.

The main raw material for the production of cement, which is clinker, as imported by GHACEM and Diamond Cement, is explicitly classified under HS Code 2523.10.00.00, while finished Gray Ordinary Portland cement, as imported by Greenview International Company Limited, is unambiguously classified under HS Code 2523.29.00.00 as per internationally accepted classified standards, they submitted.

As a result of the misclassification, the petitioners further alleged, the government earned only a quarter of the actual duty rate supposed to have accrued from the importation of the finished cement products in view of the fact that they were admitted by the Customs Division of the Ghana Revenue Authority (GRA) at a concessionary duty rate of five per cent under the Harmonized Chapter 25 Code 98, instead of 20 per cent.

According to the petitioners, the implication of the payment of concessionary duty rate was that the imported finished bulk cement was being considered as raw materials, which was actually not the case.

Information gathered from the Ministry of Trade and Industry indicates that cement could be imported into the country provided the importer has obtained licence from the Environmental Protection Agency (EPA).

Finished cement products, it was confirmed, attract 20 per cent import duty, while raw materials meant for further manufacturing process attract a concession rate of five per cent.

The petitioners alleged that Greenview International Company Limited had set up an import terminal at the light industrial area on the Beach Road in Tema purposely for cement bagging as approved on the schedule of the environmental permit issued by the EPA in 2003.

That, in their opinion, means Greenview does not use the imported finished cement to manufacture building materials but only packages the finished cement into 50kg bags.

It was, therefore, not appropriate to classify the finished cement under the Harmonised Chapter 25 Code 98 and, therefore, benefit from the five per cent concessionary import duty rate, they contended.

This anomaly must be corrected and the appropriate duty from Greenview International Company Limited must be collected to ensure a level playing field for competition in the cement market in Ghana, they added.

Making further comments on the issue, the Strategic and Corporate Affairs Director of GHACEM, Dr George Dawson-Amoah, said the activities of Greenview did not encourage fair competition and called on the government to act promptly to address the anomaly.

When contacted, an official of Greenview International Company Limited declined to comment on the issue, referring the Daily Graphic to the Managing Director who, he said, would not be available until after September 12, 2011.

Apart from the one million tonnes annual capacity plant in Tema, the Greenview International Company Limited intends to construct another packaging plant in Tamale in the northern part of Ghana to give it a competitive niche on the market.

Furthermore, in view of the high demand of the company’s portland cement, management intends to establish a cement manufacturing mill in Ghana after securing a good limestone site for its operations.