Businessman sues GRA over wrongful classification of vehicle

Apr 01, 2021 News

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Kaieteur News – Businessman and cattle farmer, Mohamed Shaw Jahan is suing the Guyana Revenue Authority (GRA) over an alleged wrongful classification of vehicle which was imported to transport goods.
In a statement to the Press, Jahan explained that since the arrival of his Toyota Land Cruiser van on December 20, 2020, he has been unable to clear it due to the nearly $14M in duties and taxes that the GRA would require as a result of their incorrect classification.
According to the businessman, the vehicle has since been kept at the John Fernandes terminal and facilities incurring storage costs for months.
Jahan who also sells vehicle parts and spares on the East Coast of Demerara explained that on October 30, 2020, he bought the land cruiser from the United Kingdom where it was classified as a ‘light goods vehicle’. However, the GRA insists that the vehicle is a passenger vehicle and has held the vehicle claiming the duties and taxes.
As such, Jahan has moved to the Supreme Court suing the GRA and its Commissioner General, Godfrey Statia, over the wrongful classification.
Through his attorney-at-law, Siand Dhurjon, the businessman contends in the Fixed Date Application (FDA) that the vehicle ought to be categorised and registered as a goods vehicle whereby he should only have to pay around $1.8M in taxes and duties to the government.
Dhurjon has made it clear that because the land cruiser is a special model which only has two seats, two doors, two ventilating windows, a flatbed cargo area to the rear and a barrier between the cargo area and the driver area, it is ‘exclusively qualified to be a goods vehicle’.
Dhurjon states that any classification of the vehicle as a passenger vehicle would be an erroneous misclassification and a misapprehension of the Common External Tariff found in Schedule 1 of the Customs Act, the Harmonised System Classification Codes and the World Customs Organisation’s Explanatory Notes on the issue.
The matter is fixed for hearing before Justice Damon Yonge on 22nd April, 2021. By then, the Commissioner General of the GRA will have to justify the classification of the land cruiser as a passenger vehicle and why the vehicle ought not be classified as a goods vehicle.
According to paragraph 15 of Jahan’s affidavit in the lawsuit filed “when a vehicle is permitted to be registered as a goods vehicle, it is granted a very favourable tax treatment – in this case, if the vehicle is classified as a goods vehicle, Jahan should only have to pay $1,871,457 in total duties and taxes to clear the vehicle. However, if classified as a normal passenger vehicle, Jahan would have to pay about $13,890,384 in total.”
Jahan explained in his affidavit that he sought to meet Statia over the wrong classification of the enclosed 2,800cc diesel van as a “vehicle principally designed for the transport of persons.” But this meeting was never permitted instead Jahan was referred to another officer of the GRA who maintained the erroneous position that the vehicle is a passenger vehicle. A ‘classification committee’ of the GRA later sustained such a ruling in a vague letter sent to Jahan.
Jahan’s lawsuit explains to the court that the GRA “has no written policy, guidelines or information available from their office on what features/criteria, which they would accept or deny classifying a vehicle as a goods vehicle. The officers, employees and agents of the GRA would often say what the criteria are, but would give contradictory information.”
In the circumstances, Dhurjon has applied to the Supreme Court on behalf of Jahan for several orders including a declaration that the vehicle is “a motor vehicle used for the transport of goods; a declaration that the classification of the GRA/Commissioner General that the vehicle is a passenger vehicle is arbitrary, ultra vires, unreasonable, irrational, unfair, an abuse of power, unconstitutional, whimsical, capricious, against the Revenue Authority’s own policy and without any legal foundation or authority; an order to quash the classification of the vehicle as a passenger vehicle; an order of prohibition to forbid any computation of taxes under the drastically higher taxation scheme applicable to a passenger vehicle; an order to compel the Commissioner General to take all steps necessary to recognise, classify and accept the vehicle as a goods vehicle; an order of certiorari to compel the Commissioner General to take all steps necessary to accept the sum of $1,871,457 in total duties and taxes already paid and to clear and release the vehicle to Jahan forthwith; an order that the Commissioner General compensate Jahan for the storage costs owed by him to John Fernandes Ltd. due to the GRA’s unlawful actions; an order that the Commissioner General pay damages; and an order that the Commissioner General pay Jahan’s costs of the proceedings.”

 

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