Thu, 27 Oct 2016 08:39:43 +0000
ZAMBIA Revenue Authority (ZRA) has been ordered to pay a refund of over K13,000 on Value Added Tax to Balmoral Farms Limited.
According to a ruling delivered by the Tax Appeals Tribunal (TAT), ZRA had disallowed a VAT refund to the farm for coffee exported on its behalf by the Zambia Coffee Growers Association. Tribunal chairman Frazer Chishimba said the decision by ZRA to disallow VAT refund claims was ultravires and void ab initio because the farm did not sell the coffee directly but handed it over to the Association which sold and paid the export tax, being the sole exporter of coffee in Zambia.
He said the authority must therefore refund Balmoral up to K13,703 with interest at the short term bank rate from the date due for refund according to the VAT forms filed.
Mr Chishimba, sitting with Mr G. Nonde and Ms M. Kampata, explained that according to the Coffee Act of 1989, there was an inconsistency in the action taken by ZRA against legal provisions, which implied that the applied Act must be annulled under the provision.
The appellant contended the decision by ZRA to surcharge them VAT which was already paid for at the point of export by ZCGA.
He said the move was inconsistent with the provisions of the Coffee Act and that ZRA could not use General 18 as amended of the VAT Act to look at Balmoral as a supplier of a taxable supply when why could not issue a tax invoice since they were not sellers.
He said Balmoral was not authorised to sell the coffee in Zambia which made them ineligible to pay VAT, as the cost would fall on the exporters, the association.
“The appellant in this case cannot even issue any Tax Invoice to ZCGA as doing so would amount to selling the coffee produce which only ZCGA can do as by law established.
“Doing so would amount to an offence under Section 55 of the Coffee Act,” Mr Chishimba said.
He said the tribunal in its findings established that it was unreasonable for Balmoral to be expected to produce documents enumerated in a changed law, as such their appeal had succeeded.
“In the position we have taken, this is a small consolation for the respondent as the appeal has succeeded in the main and it therefore follows that costs shall follow the event,” they tribunal ruled.