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Amatheon Agri Uganda Limited v Uganda Revenue Authority (TAT Application 7 of 2021)

Tribunal · [2022] UGTAT 19 · 2022 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application for review of URA objection decision rejecting input VAT credit and issuing VAT assessment
Decision
Application partly allowed; applicant awarded refund of VAT erroneously paid on exempt imports but liable for apportioned input tax credit

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal held that the applicant was entitled to a refund of VAT erroneously paid on exempt imports of agricultural machinery totaling Shs. 1,557,624,702, but was liable for apportioned input tax credit of Shs. 1,692,433,735 arising from mixed taxable and exempt supplies. The Tribunal declined to address the issue of illegal 15% domestic VAT as it was not raised in the objection or pleadings.

Outcome

Application partly allowed; applicant awarded refund of VAT erroneously paid on exempt imports but liable for apportioned input tax credit

Facts

Amatheon Agri Uganda Limited, an agricultural company, imported agricultural machinery and spare parts between 2014 and 2017, paying VAT at importation totaling over Shs. 2 billion. URA conducted a tax audit for January 2015 to May 2020 and issued a VAT assessment of Shs. 325,024,817.85 on 29 September 2020. The applicant objected, claiming it had erroneously paid 18% VAT on exempt agricultural imports and was entitled to input tax credits. URA rejected most claims, arguing the applicant was not VAT-registered when some imports occurred and that input tax must be apportioned between taxable and exempt supplies. The parties reached partial consent on some issues, leaving disputes over VAT on exempt imports, apportionment methodology, and alleged illegal domestic VAT for tribunal determination.

Issues

  1. Whether the input tax claimed by the applicant is payable?
  2. Whether the VAT of Shs. 325,024,817.85 is payable?
  3. What remedies are available?

Orders

  • Shs. 1,692,433,735 the apportioned input tax credit is payable by the applicant.
  • The applicant is awarded Shs. 1,470,030,620 erroneously paid as VAT on exempt imports.
  • The applicant is entitled to the VAT erroneously paid of Shs. 87,594,082.
  • Each party to bear its costs.

Rules and key headnotes

VAT — Scope of Tax Appeals Tribunal Review — Limitation to Objection Grounds
Where an application for review relates to an objection decision, the applicant is limited to the grounds stated in the taxation objection unless the Tribunal orders otherwise, and parties cannot raise new issues at the submission stage that were not pleaded or addressed during scheduling.
VAT — Exempt Imports — Agricultural Machinery
Under s.20(1)(b) of the VAT Act, an import of goods is an exempt import if the goods would be exempt had they been supplied in Uganda, and agricultural machinery, tools and implements suitable for use only in agriculture are exempt supplies under the Second Schedule Paragraph 1(s), such that VAT paid on such imports is erroneously paid and refundable.
VAT — Input Tax vs. Tax Paid in Error — Exempt Supplies
Input tax under s.1(1) of the VAT Act is defined as tax paid in respect of a taxable supply, and where a taxpayer pays VAT on an exempt supply, the payment is not input tax but tax paid in error, such that the issue of VAT registration timing and the six-month limitation under s.28(3) does not arise.
VAT — Apportionment of Input Tax — Mixed Supplies
Where a taxable person makes mixed supplies of taxable and exempt goods, input tax must be apportioned according to the formula in s.1(f) of the Fourth Schedule to the VAT Act as required by s.28(7)(b), and the Tribunal will apply its previous decision on the same taxpayer's classification of supplies unless good grounds are shown to depart from it.
Legitimate Expectation — Tax Administration — Burden of Proof
For a taxpayer to establish that URA is bound by legitimate expectation arising from a communication, the taxpayer must prove that the communication gave rise to a legitimate expectation, and a taxpayer cannot abrogate its duty to apply for refund of overpaid tax and then blame URA for its inaction.
VAT — URA's Role — No Duty to Provide Tax Consultancy
URA's mandate under s.3(1)(a) of the Uganda Revenue Authority Act is to administer and give effect to tax laws, assess, collect and account for revenue, and does not include offering consultancy services to taxpayers on tax planning or refund procedures.

Legislation cited (18)

Cases cited (11)

  • Haji Kaala Ibrahim v Attorney General & Commissioner General of URA (Miscellaneous Cause No. 23 of 2017)
  • Margaret Akiiki Rwaheru & 13,945 Others v Uganda Revenue Authority (Civil Appeal No. 98 of 2015)
  • Makula International Limited v Cardinal Nsubuga & Another (Civil Appeal No. 4 of 1981)
  • Interfreight Forwarders (U) Ltd v East African Development Bank (Civil Appeal No. 33 of 1992)
  • Nakirya Ssekataba & Another v Attorney General (Civil Appeal No. 38 of 2003)
  • Post Bank (U) Ltd v Uganda Revenue Authority (TAT Application No. 18 of 2008)
  • Manilla North Tollways Corporation v Commissioner of Internal Revenue C.T.A EB No. 812 of 2012
  • R v Inland Revenue Commissioners Ex Parte Mfk Underwriting Agents Limited [1989] STC 873
  • National Social Security Fund v Uganda Revenue Authority (HCCA No. 29 of 2020)
  • Attorney General v Bumero Estates Ltd (Supreme Court Civil Appeal No. 19 of 2019)
  • Amatheon Agri Uganda Limited v Uganda Revenue Authority (TAT Application No. 50 of 2018)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Amatheon Agri Uganda Limited v Uganda Revenue Authority (TAT Application 7 of 2021) 2022 UGTAT 19 (18 August 2022)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.