By BUUMBA CHIMBULU
ZAMBIA’s Supreme Court has ruled that Zambia Revenue Authority (ZRA) is entitled to verify whether the goods imported from Southern African Development Community (SADC) member state conform to the Certificate of Origin issued by the exporting member country.
This was in a case in which Henred Fruehauf Zambia Limited challenged the decision of ZRA to deny preferential treatment of six second-hand trailers that the company imported into Zambia from South Africa in 2019, for use in the transportation of goods.
When the trailers arrived at the Zambian border accompanied by SADC Certificates of Origin issued from South Africa, the clearing agents for Henred Fruehauf Zambia Limited claimed that the trailers were entitled to preferential treatment for importation into Zambia without payment of customs duty because they were partially produced in a SADC Member State namely; South Africa.
This was according to a statement issued in Lusaka by ZRA corporate communications manager Topsy Sikalinda.
Mr Sikalinda explained that ZRA declined to accord preferential treatment to the second-hand trailers on the basis that the trailers did not satisfy the provisions of rule 4(1) h of Annex 1 to the SADC Protocol on Trade.
He indicated that ZRA argued that the trailers could only obtain preferential treatment where the trailers were imported into Zambia for the collection or recovery of raw materials and not for use in the transportation of goods.
“Since the trailers were imported for use in the transportation of goods, they were subject to the payment of customs duty,” Mr Sikalinda said.
Henred Fruehauf Zambia Limited challenged ZRA’s decision in the Tax Appeals Tribunal, which also ruled in favour of ZRA, prompting Henred Fruehauf Zambia Limited to appeal to the Supreme Court.
Before a panel of Supreme Court judges consisting of the former Acting Chief Justice Michael Musonda, SC and Supreme Court judges Albert Wood and Nigel Mutuna, Henred Fruehauf Zambia Limited argued that ZRA should have accepted the mere production of the Certificates of Origin from South Africa as proof of originating status for the second-hand trailers and allowed the trailers to be cleared under preferential treatment.
However, the Supreme Court dispelled the argument stating that ZRA was authorised, in case of doubt, to verify the statements contained in the certificate of origin issued by a SADC Member State.
The Supreme Court further held that there was no ambiguity nor misinterpretation of the rules in the SADC Protocol on Trade and dismissed the appeal with costs to ZRA.
Author
