Revenue authority inspecting DDL’s 2006 c-tax records

-following appeal court ruling in favour of company
Demerara Distillers Limited (DDL) says it is cooperating with the Guyana Revenue Authority (GRA) which has asked it to produce for inspection its books, accounts and other documents for the period January to December 2006 pursuant to Section 17 (1) and (2) of the Consumption Act.

The company made the revelation in a statement to the press late yesterday, noting that the GRA officers visited its Plantation Diamond, East Bank Demerara location and made the request. DDL said it is co-operating with the officers but noted that the visit comes closely on the heels of a recent ruling by the Guyana Court of Appeal which upheld a 2005 High Court judgement in favour of it against the GRA with respect to the calculation of the Consumption Tax (C-Tax). DDL had moved to the court in 2002 but the GRA had appealed the matter after judgement in 2005. That appeal was dismissed by a court of appeal panel comprising Chancellor (ag) Carl Singh, Chief Justice (ag) Ian Chang and Justice William Ramlal on July 31 this year.

Efforts by this newspaper to contact GRA Commissioner General Khurshid Sattaur following the issuing of the DDL statement were futile and Stabroek News was advised by a clerk who was still in office at 6 pm, that the Corporate Communications Office was also closed. He requested that this newspaper make contact with the office today.

In a recap of the original ruling which was handed down by Justice Dawn Gregory-Barnes on February 1, 2005, DDL said it had asked the court to rule that it was being taxed twice by the GRA with respect to C-Tax on alcohol products manufactured at Diamond and sold on the local market. It further stated that the amounts of C-Tax claimed by the GRA were based on a valuation of the goods, which was based on a wholesale price list of DDL. The company had argued that the wholesale price list already included the C-Tax on the products as well as the cost of delivery by DDL to the customer and therefore it had asked that the tax be based on the valuation of the products when held in its Customs Bonds. The case covered manufacturing activity between January 2001 and September 2002.

DDL said Justice Gregory-Barnes in her written judgement found that the inclusion by the GRA in the taxable value of the tax itself (50%) and the cost of delivery of the good was unlawful and not in keeping with the provision of Chapter  80:02 of the Consumption Tax act. That Act has since been replaced by the Value-Added Tax legislation.

For the disputed period, DDL said that it paid the C-Tax on a wholesale valuation of the goods based on its cost of production plus a 15% mark-up in keeping with a previous statement by President Bharrat Jagdeo at a Guyana Manufacturers’ Association AGM, in response to representations made to him by the association.