Alleged breaches on duty free concessions… GRA demands businessman pay $212M in duties, taxes

Mar 18, 2017 News

A Berbice businessman has taken the Minister of Finance and the Guyana Revenue Authority (GRA) to court over a decision to cancel his concessions and make him pay more than $200M in customs duties and taxes.
According to court documents, the businessman, Inshanally Bacchus, Chief Executive Officer of
I & R Bacchus Trucking Service of Bush Lot Village, West Coast Berbice, was granted an Order or Rule Nisi of Certiorari, directed to the Minister of Finance, quashing his decision made on November 23rd, 2016.
That decision, by the minister, purports to terminate the Investment Development Mineral Prospecting, Mining and Stone Quarrying Agreement entered on March 13th, 2014, between the businessman and the Government of Guyana, represented by the Minister of Finance.
The businessman, through his arguments, said that the decision was capricious, whimsical, arbitrary, in breach of the rules of natural justice, in violation of his legitimate expectations and is unlawful, null, void and of no effect. The Minister of Finance was called upon to show cause why this order nisi should not made absolute.
Another order was also issued to Fitzroy Corlette, Head of GRA’s Law Enforcement, quashing his decision to demand from the applicant by letter dated November 22nd, 2016, the sum of $212.3M as Customs duties and taxes. Those Customs duties and taxes related to certain machinery, equipment and motor vehicles, Bacchus stressed, represents penalties on tax exemptions which were lawfully granted.
Corlette and GRA were asked to defend the decision, barring which it would be overturned.
Bacchus was also granted an order or Rule Nisi of Prohibition against GRA restraining it and its servants and/or agents from seizing, forfeiting and/or disposing certain machinery, equipment and motor vehicles, and that GRA be made to show reasons why the orders should not be absolute.

BAUXITE DEAL
According to the affidavit supporting his contentions, the businessman said that on October 29th, 2013, he entered into a written agreement with Bauxite Company of Guyana Inc., a mining company carrying out certain mining operations mainly at Kurubuka, Upper Berbice River, Guyana. These included excavating and transporting bauxite overburden.
The businessman by way of letter dated November 14th, 2013, said he applied to the then Minister of Natural Resources and the Environment, Robert Persaud, for a waiver of duty and taxes on a list of trucks and machinery. He submitted copies of the contract and quotations.
According to Bacchus, the application was duly processed and he was informed by telephone to attend the office of the Guyana Geology and Mines Commission (GGMC), Upper Brickdam, where he was presented with an agreement already prepared for signature.
Bacchus noted that he pointed out that his sole purpose was for work at the bauxite site and not gold mining.
“I was then informed by officers of the Guyana Geology and Mines Commission and verily believed that the agreement was the standard proto-type agreement which were being used by the Guyana Geology and Mines Commission for the purpose of recommending the grant of the concessions for which I applied to the Minister of Natural Resources and the Environment.”
The agreement was also signed by the then Minister of Finance, Dr. Ashni Singh on behalf of Government and witnessed by GRA and GGMC staffers.
The businessman said he was asked to apply to GRA for VAT exemptions on the equipment. This was granted for eight heavy-duty Caterpillar machines. He also later was granted concessions by GRA on eight Caterpillar trucks and one excavator costing $464M.
Bacchus said he applied for and was granted more duty free concessions in 2015. He spent almost $960M more.

QUESTIONABLE ARRANGEMENTS
However, that same year, the businessman’s contract ended with the equipment parked for several months. In August, 2016, the businessman said he was contracted by China Harbour Inc. to transport sand and loam for the construction of a new international airport at Timehri. He used some of the equipment he had purchased for the bauxite project.
However, in November last year, the businessman said that GRA and Corlette wrote him and pointed out that his equipment and concessions were under investigation.
“The investigation revealed that neither you nor your company is the holder of a Prospecting Licence, Mining Permit, Privilege nor any other licence issued by the Guyana Geology and Mines Commission (GGMC), but was rather sub-contracted by RUSAL Bauxite Company of Guyana to remove overburden and transship bauxite from Kurubaka.”
GRA insisted that this was contrary to the investment agreement, which specifically stated that he would be involved in the mining for silica sand and not his contractual obligation with the RUSAL Bauxite Company of Guyana to remove overburden and transship bauxite.
GRA told the businessman that he had breached the conditions of the concessions when he also utilized some of the motor vehicles and equipment at the CJIA expansion project, “contrary to the purpose for which the concession was granted by GRA”.
He was asked to pay $212.3M within 14 days of receipt of the letter. Failure to comply will result in GRA taking the necessary steps to locate, seize and immediately commence forfeiture and disposal proceedings of these items in accordance with the provisions of the Customs Act, Chapter 82:01.
However, Bacchus took a lawyer, Anil Nandlall, who in a letter to the GRA contested the arguments and insisted that no conditions were breached.
In addition to Nandlall, the other lawyers representing the businessman are Manoj Narayan, Sasha S. Mahadeo-Narayan and Rajendra Jaigobin.