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The Caribbean Court of Justice (CCJ) today handed down its judgment in the merged cases of Trinidad Cement Limited and Arawak Cement Limited v. the State of Barbados and Rock Hard Cement Limited v. the State of Barbados and the Caribbean Community (CARICOM). The CCJ ruled that the regional tax payable on “other hydraulic cements” imported by Rock Hard Cement from Portugal and Turkey was 5%. The case falls within the original jurisdiction of the CCJ, where the Court interpreted the Chaguaramas Amendment Act.
In 2001, the Caribbean Community’s Committee for Trade and Economic Development (COTED) granted Barbados an exemption from the regional Common External Tariff (CET) of 0-5%, which allowed the country to levy a 60% duty on the category of cement described as “other hydraulic cements.” The regional tariff is designed to provide an advantage over imported goods produced and distributed in the region. In 2015, Barbados decided to reinstate the CET and impose a 5% duty on “other hydraulic cements” imported by Rock Hard Cement Limited.
In its ruling, the Court ruled that if COTED allows a member state to impose a tax higher than the regional tariff on goods imported from outside the region, the member state does not need to obtain COTED’s approval to reinstate the CET. However, in such cases, the member state should give reasonable notice of its intention to reinstate the regional tariff. The Court said that this notification would ensure that regional businesses enjoy transparency, certainty and predictability in the tax structure. The Court held that this “reflects good administrative practice, safeguards the sovereign autonomy of the member states and ultimately enhances the overall functioning of the CSME”.
The Court also found that the regional cement manufacturers that had brought the case against Barbados had known of Barbados’ intention to reinstate the regional tariff and therefore their case could not succeed.
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