Value added tax

Uganda Revenue Authority Vs Tata (U) Ltd (CIVIL APPEAL NO. 007 OF 2008) [2016] UGCOMMC 8 (25 January 2016);


Search Summary: 

Revenue – Value Added Tax – Responsibility to pay VAT – Appeal against the ruling of Tax Appeals Tribunal

Headnote and Holding: 

Respondent, being a member of the Uganda Motor Vehicle Importers Association is a limited liability company dealing in importation and sale of motor vehicles, spare parts, pharmaceutical and medical products etc. It is the contention of the respondent that the transaction of sale in bond had for a long time been an area of controversy as it traversed both the VAT Act and the East African Customs Management Act. Some members of the Association had written to the appellant requesting for clarification on the tax treatment, in response thereof, the appellant stated that the VAT due should be that computed by the Customs Department and payable by the customers. The respondent sold the vehicles to the Government Departments on the basis that the customers bore the tax liability, after their commitment to pay taxes at a later date. Later, the appellant conducted an assessment on the respondent, which was appealed against by the respondent to the Tax Appeals Tribunal. The ruling of the Tribunal, which was in favor of the respondent, was appealed against by the appellant in this court.

  1. The responsibility to pay VAT on the goods rested on the Government Departments, all penalties for non-payment or late payment would have lain with those departments and not on the respondent. But these are exempt from payment of tax under section 2(1)(a) of the Customs Tariff Act and Schedule 3 of the Finance Act 2001. Hence they should not be penalized in penalties and costs.
  2. That the Tribunal properly evaluated the evidence before it and arrived at the correct decision. The decision is hereby upheld.
Subscribe to RSS - Value added tax