HON. CLEMENT APAAK {PLAINTIFF} vs. GHANA REVENUE AUTHORITY [2018]DLHC6279

Date	2018-07-31
Suit No.	Suit No. CM/TAX/0448/2017
Citation No.	[2018]DLHC6279

JENNIFER DODOO (MRS)

DR. DOMINIC AYINE

C. ODARTEY LAMPTEY

[2018]DLHC6279
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													<main id="main" class="content" style="min-height: 60rem" >HON. CLEMENT APAAK<o:p></o:p>{PLAINTIFF}<o:p></o:p>vs.<o:p></o:p>GHANA REVENUE AUTHORITY<o:p></o:p>{DEFENDANT}<o:p></o:p>[HIGH
COURT (COMMERCIAL DIVISION), ACCRA]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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Suit No. CM/TAX/0448/2017&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;DATE: 31ST JULY 2018<o:p></o:p>

</div>COUNSEL:
<o:p></o:p>DR. DOMINIC AYINE<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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C. ODARTEY LAMPTEY<o:p></o:p>

</div>CORAM:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p>JENNIFER DODOO (MRS) JUSTICE OF THE
HIGH COURT<o:p></o:p><div style="mso-element:para-border-div;border-top:solid windowtext 1.5pt;
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<p class="MsoNormal" align="center" style="text-align:center;line-height:115%;
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solid windowtext 1.5pt;padding:0in;mso-padding-alt:1.0pt 0in 1.0pt 0in">JUDGMENT<o:p></o:p>

</div><o:p>&nbsp;</o:p>It is provided for in Section 100(1)
of the Revenue Administration Act, 2016 as follows:<o:p></o:p><o:p>&nbsp;</o:p>To
achieve consistency in the administration of tax laws and to provide guidance
to persons affected by the tax laws, including tax officers, the
Commissioner-General may issue practice notes setting out the interpretation
placed on provisions of a tax law by the Commissioner-General.<o:p></o:p><o:p>&nbsp;</o:p>So it came to pass that in consonance
with Section 100(1), the Commissioner-General of the Defendant Authority issued
Practice Note Number IDT/2017/001 on 23rd June 2017. <o:p></o:p><o:p>&nbsp;</o:p>Aggrieved by the provisions
contained in the Practice Note, the Plaintiff claimed against the Defendant the
following reliefs:<o:p></o:p><o:p>&nbsp;</o:p><ol style="margin-top:0in" start="1" type="a">
 <li class="MsoNormal" style="text-align:justify;line-height:115%;mso-list:l3 level1 lfo1">A declaration that the
 Defendant’s purported act of extending the coverage of the VFRS to
 importers of taxable goods through the aforesaid Practice Note is unlawful.<o:p></o:p></li>
 <li class="MsoNormal" style="text-align:justify;line-height:115%;mso-list:l3 level1 lfo1">A declaration that by
 subjecting importers to both the VFRS and the standard rate of VAT whilst
 at the same time barring the said importers from deducting input VAT, the
 Defendant has discriminated against the said importers in contravention of
 Article 17 of the Constitution .<o:p></o:p></li>
 <li class="MsoNormal" style="text-align:justify;line-height:115%;mso-list:l3 level1 lfo1">A declaration that all persons
 currently under the VFRS who paid VAT at the standard rate prior to the
 coming into force of the 2017 VAT Act have accrued rights to deduct input
 VAT paid prior to the coming into force of the said Act;.<o:p></o:p></li>
 <li class="MsoNormal" style="text-align:justify;line-height:115%;mso-list:l3 level1 lfo1">An order for the refund of all
 input VAT paid or, in the case of VAT that is payable, a set-off against
 VAT to be paid under and by virtue of the VFRS; and<o:p></o:p></li>
 <li class="MsoNormal" style="text-align:justify;line-height:115%;mso-list:l3 level1 lfo1">Any such further order or
 orders as this Honourable Court shall deem necessary in the circumstances
 of this case.<o:p></o:p></li>
</ol><o:p>&nbsp;</o:p>The Plaintiff’s case as set forth in
his Statement of Claim was that the Value Added Tax (Amendment) Act, 2017 (Act
948) (referred to hereinafter as the 2017 VAT Act) was passed to provide legal
backing to the VAT Flat Rate Scheme (VFRS) to facilitate the collection of
value added taxes on the supply of goods in the distribution chain.&nbsp; He contended that the Act imposed a flat
value added tax rate of 3% calculated on the value of the taxable supply and
proceeded to disqualify a person subject to the flat rate from deducting input tax
in respect of goods subject to the tax.<o:p></o:p><o:p>&nbsp;</o:p>The Plaintiff contended that by virtue
of section 1(a) of the Act, wholesalers and retailers of taxable goods were
placed on the VFRS and therefore statutorily disqualified from deducting input
tax from their sale of taxable supplies.<o:p></o:p><o:p>&nbsp;</o:p>The Plaintiff submitted further that
the Defendant as the public agency responsible for tax administration and for
the purpose of implementing the VFRS issued a Practice Note number IDT/2017/001
dated June 23, 2017 titled “Practice Note on the Application of the VAT Flat
Rate Scheme under the Value Added Tax Act, 2013 (Act 870)”.&nbsp; According to the Plaintiff, the Practice Note
sought to implement section 1 (a) of the 2017 VAT Act by extending the coverage
of VFRS to importers of taxable supplies who either sold their goods to
retailers or directly to consumers.<o:p></o:p><o:p>&nbsp;</o:p>Plaintiff further complained that
whilst importers were still liable to pay VAT/NHIL at 17.5%, they were also
subject to the charge of VAT/NHIL at 3% and that this was unlawful as there was
no justifiable basis for this in the 2017 Act.<o:p></o:p><o:p>&nbsp;</o:p>The Plaintiff also maintained that
whilst subjecting importers to both rates of VAT/NHIL, the Defendant
disqualified them from deducting their input tax which was a right available to
all other persons subject to the payment of the standard rate VAT.&nbsp; This, the Plaintiff said would be subjecting
the said importers to dissimilar treatment from these other persons.<o:p></o:p><o:p>&nbsp;</o:p>