13 LBCs drag GRA, COCOBOD to court …over proposed VAT charges on trucking, haulage

Thirteen Licensed Buying Companies have sued the Ghana Revenue Authority (GRA) over attempts to impose Value Added Tax (VAT) on truckingand haulage activities.

They include Kuapa Kooko Company Limited, Federated Commodities Company Limited, Sika Aba Buyers Limited, CDH Commodities Limited, Adikanfo Commodities Limited, Olam Ghana Limited, Unicom Commodities Ghana Limited and others.

Joined to the suit are the Commissioner General of GRA, Ghana Cocoa Board and its Chief Executive.

In its statement of claim accompanied by a number of declarations, the plaintiffs said that they are companies registered under the laws of Ghana and carry on business in the agricultural sector (specifically Cocoa, Shea and Coffee) as Licensed Buying Companies (LBCs) authorised by the Ghana Cocoa Board Act, 1984 (PNDCL 81) to purchase cocoa for and on behalf of the Ghana Cocoa Board.

The plaintiffs stated that after the promulgation and enactment of the Value Added Tax Law, the plaintiffs and the other LBCs had always been exempted from invoicing for VAT purposes, auditing, assessment and/or payment of Value Added Tax (VAT) up until 2019, spanning a period of 24 years.

The plaintiffs argued that the attempt to charge VAT on trucking and haulage which are integral to the supply of raw cocoa to the Ghana Cocoa Board smacked bad faith since those activities are exempt from VAT.

It said that the GRA had subjected plaintiffs and other LBCs to VAT payment from the period commencing from 2014 to date, and it is only the court that can stop the first and second defendants from harassing plaintiffs and ultimately collapsing their businesses.

The plaintiffs contended that per section 35 and section 3 of the first schedule to the Value Added Tax Act, 2013 (act 870) as amended, the activities of the plaintiff, particularly trucking and haulage, are activities integral to the supply of raw cocoa to the Ghana Cocoa Board, as the said activities are and inextricable from the supply process. As such, the Plaintiffs say that the truckingand haulage of cocoa by them are exempt from Value Added Tax.

It said it is the Ghana Cocoa Board that is liable to pay VAT, if such payment is so applicable because plaintiffs are acting as agents of the Ghana Cocoa Board.

They stated that the conduct of defendants is causing unbearable and unjustifiable economic stress to them and other LBCs and could cripple their activities

Ever since the GRA showed an intention to subject the plaintiffs to pay VAT, the plaintiffs said they had engaged the Ghana Cocoa Board (as the principal on whose behalf the plaintiffs and LBCs operate) to take appropriate action with the GRA and its Commissioner General to halt the threatened levying of VAT on the plaintiffs.  However, it said, the Ghana Cocoa Board has willfully neglected to respond to correspondences on the appropriate action to be taken.

In proving bad faith, the plaintiffs contended that the GRA and its Commissioner General had all along known,believed and consistently led the plaintiffs and other LBCs for more than 22 years to believe that by law the plaintiffs are exempt from payment of VAT.

The plaintiffs asked for a declaration that the activities of truckingand haulage of agricultural products, including cocoa, coffee and shea nuts in their raw state, form part of a chain of many procedures and processes of the supply of agricultural products in their raw state and therefore exempt from VAT.

They further asked the court to declare that the Plaintiffs and other LBCs who by their operations engage in supply procedures and processes including trucking and haulage of agricultural products in their raw state are exempt from audits, valuations, assessments and payment of VAT.

They urged the court to perpetually injunct or restrain the GRA and its Commissioner General, acting either by themselves, their agents, officers, assigns, employees or any other person acting under their instructions from ever auditing, purporting to audit, assessing or purporting to assess the plaintiffs for the purposes of charging the plaintiffs to pay VAT.

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