Banks DIH confident in tax write-off case against GRA

Jan 20, 2018 News

Beverage giant, Banks DIH Limited, is confident it has a solid case against the Guyana Revenue Authority (GRA).

The case filed in April last year is still engaging the High Court’s attention, and has to do with tax write-offs that Banks DIH believes it is entitled to, similar to what was granted to its competitor, the Demerara Distillers Limited (DDL)

The matter was raised in the 2017 Annual Report of Banks DIH. The report is to be presented next week Saturday when the group holds its Annual General Meeting at its Thirst Park headquarters.

According to the Board of Directors Report on current litigation matters, on 1^st April 2016, GRA consented to a substantial tax write-off for a local manufacturing company (DDL).

“Acting on legal advice, Banks DIH wrote to the Guyana Revenue Authority claiming that it was entitled under Article 149D of the Constitution to be treated equally by the state as it treated the local manufacturing company’s liability. Guyana Revenue Authority did not respond favorably.” Banks DIH said that as a result, acting on legal advice, it caused to be filed in the High Court of Guyana, legal proceedings against the GRA and the Attorney General of Guyana.

The beverage giant is asking for “…a declaration that Banks DIH Limited is entitled under Article 149D of the Constitution to have the Guyana Revenue Authority treat its liability for Consumption Tax for the years 2001-2006 and its liability to Excuse Tax for the years 2007-2016 equally or materially in similar manner as the Guyana Revenue Authority treated a local manufacturing company’s liability for the same taxes during the same periods as embodied in the Consent Order dated 1^st April, 2016.”

In April 2016, DDL announced that an amicable settlement has been reached with the GRA to resolve a longstanding dispute over Consumption Tax that began since in 2002.
The settlement follows an extended legal battle between DDL and GRA arising out of the Consumption Tax assessment levied against the company by then Commissioner-General Khurshid Sattaur in January 2009, in the sum of $5,392,020,753.
This assessment was immediately challenged in the High Court by DDL, through its lawyers, Miles Fitzpatrick, S.C. and Timothy Jonas.
DDL and GRA were able to recommence negotiations for a resolution of the methodology for a calculation of Consumption Tax (and its successor, Excise Tax). A deal was reached for DDL to settle for $1.5B.
In 2002, DDL had disclosed, it had raised a legal challenge against the GRA on the methodology adopted by the latter for the assessment of Consumption Tax.
In February 2005, the High Court judged in favour of DDL. The GRA subsequently appealed that decision, and on July 31, 2008, the Guyana Court of Appeal unanimously dismissed GRA’s appeal.
Following the dismissal of the appeal, the GRA commenced a new assessment in August 2008 and, notwithstanding attempts by the parties at resolving the matter, on January 16, 2009, GRA issued a new claim in the amount of G$5,392 billion.

On DDL’s application in 2009, the High Court issued an Order Nisi pending the hearing of the matter.

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