More than 10 Licensed Buying Companies (LBCs) are suing the Ghana Revenue Authority (GRA) for what they claim to be the authority’s insistence on collecting Value Added Tax (VAT) from them.
Apart from the GRA, the suit which was filed yesterday cites the Commissioner-General of the GRA as well as the Ghana Cocobod and its Chief Executive Officer as the defendants. The plaintiffs want the court to order the authorities to exempt them from the payment of VAT.
The plaintiffs include Kuapa Kooko Co. Ltd, Federated Commodities Co. Ltd, Sika Aba Buyers Ltd, CDH Commodities Ltd, Adikanfo Commodities Ltd, Olam Ghana Ltd, Unicom Commodities Ghana Ltd, Licensed Cocoa Buyers Ass. of Ghana (Licobag), Agroecom Ghana Ltd, Nyonkopa Cocoa Buying Ltd, Cocoa Merchants Ghana Ltd and M. Ghazalli Ltd.
They are seeking a declaration that “the activities of trucking and haulage of agricultural products, including cocoa, coffee and sheanuts 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 also want a declaration 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.”
To the plaintiffs, “the purported or effective selection or sampling of the plaintiffs and other Licensed Buying Companies (LBCs) for audits and assessments for the purposes of levying Value Added Tax (VAT) on them or any completed assessment for the payment of VAT by the plaintiffs is arbitrary, inequitable, unreasonable, unfair, capricious, in bad faith and therefore unlawful, null and of no effect,” and want the court to declare as such.
They said, “ By virtue of the agency relationship between the plaintiffs (and other LBCs) and the Ghana Cocoa Board; and/or by virtue of the role played by the plaintiffs and other LBCs in relation to the Ghana Cocoa Board, any audit and/or assessment of the plaintiffs or any other LBCs for the payment for Value Added Tax (VAT) that leads to any tax liability on the plaintiffs is a liability incurred by the plaintiffs on behalf of the Ghana Cocoa Board; and, therefore, the 3rd defendant (Ghana Cocoa Board) is ultimately liable to be discharged any such VAT liability.”
They are, therefore, asking for an order of perpetual injunction restraining the GRA “from ever auditing, purporting to audit, assessing or purporting to assess the plaintiffs for the purposes of charging the plaintiffs to pay Value Added Tax (VAT).”
The plaintiffs also want an order for Cocobod “to fully indemnify and compensate adequately the plaintiffs on a full cost recovery basis for all Value Added Tax (VAT) purported to be assessed, actually assessed, charged and paid by the plaintiffs to the GRA,” payable with interest.
In their statement of claim, the plaintiffs said that they were companies registered under the laws of Ghana and carry on business in the agricultural sector (specifically Cocoa, Shea and Coffee) as LBCs authorized by the Ghana Cocoa Board Act, 1984 (PNDCL 81) to purchase cocoa for and on behalf of the Ghana Cocoa Board.
The defendants are yet to file a response in the case.
By Gibril Abdul Razak
