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Union Logistics Uganda Limited v Uganda Revenue Authority [2026] UGTAT 30

Tribunal · 2026 Application Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Application challenging VAT assessment following customs declaration audit
Decision
Application dismissed; VAT assessment upheld

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal held that ICD charges and transit, agency, and clearing fees constituted independent taxable supplies subject to VAT at the standard rate of 18%. ICD charges were not pure disbursements because the Applicant issued EFRIS invoices in its own name and declared the amounts as its own supplies. Transit, agency, and clearing services were separately contracted, separately priced, and commercially distinguishable from international transport, and therefore did not qualify as incidental services that assume the zero-rating of international transport. The assessment of Shs.266,740,452 was upheld.

Outcome

Application dismissed; VAT assessment upheld

Facts

Union Logistics Uganda Limited, a clearing and forwarding company engaged primarily in international freight services, was audited by URA for the period July 2018 to June 2023. URA assessed VAT of Shs.266,740,452 on services the Applicant had not charged VAT on, specifically ICD charges (Shs.26,443,788) and transit, agency, and clearing fees (Shs.1,455,447,615). The Applicant objected, arguing that ICD charges were mere disbursements paid on behalf of clients and that transit clearing services were incidental to zero-rated international transport. URA maintained that both categories constituted independent standard-rated supplies. The Applicant issued EFRIS invoices for ICD charges in its own name and was licensed as a customs clearing agent under EACCMA. The Applicant's international freight services accounted for approximately 90% of its turnover, with transit, agency, and clearing fees constituting about 5%.

Issues

  1. Whether paying money on behalf of another party is a VATable service?
  2. Whether clearing services on cross-border bound shipments/cargo are incidental services to international transportation?
  3. What remedies are available to the Applicant?

Orders

  • The assessment of Shs.266,740,452 is upheld.
  • The Application is dismissed.
  • Costs are awarded to the Respondent.

Rules and key headnotes

Value Added Tax — Disbursements — Substance Over Form
Where a taxpayer issues tax invoices in its own name for charges paid to third parties, declares those amounts as part of its taxable turnover, and does not produce contemporaneous agency agreements or disclosed principal documentation, such charges constitute taxable supplies rather than pure disbursements, notwithstanding the taxpayer's subsequent characterisation of them as payments made on behalf of clients.
Value Added Tax — Incidental Services — Single Economic Supply Test
Services are incidental to a principal supply and assume its VAT character only where they do not constitute aims in themselves but are merely means of better enjoying the principal supply. Where services are separately contracted, separately priced, separately invoiced, and commercially distinguishable, they constitute independent taxable supplies even if they facilitate or relate to a zero-rated supply such as international transport.
Value Added Tax — Customs Clearing Services — Independence from Transport
Customs clearing services provided by a licensed customs clearing agent under the East African Community Customs Management Act constitute independent taxable supplies capable of being procured as standalone services, and do not automatically assume the zero-rating of international transport merely because they facilitate cross-border movement of goods.
Value Added Tax — Burden of Proof in Assessment Challenges
Under section 28 of the Tax Procedures Code Act, the burden lies on the taxpayer to demonstrate that a tax assessment is excessive or erroneous. Where the taxpayer fails to discharge this burden, the assessment must be upheld.

Legislation cited (10)

Cases cited (5)

  • Diamond Shipping Company v Uganda Revenue Authority (TAT Application No. 21 of 2008)
  • UTODA (Entebbe Branch) Ltd v Uganda Revenue Authority (TAT Application No. 1 of 2009)
  • Card Protection Plan Ltd v Commissioners of Customs and Excise [2001] UKHL
  • Total Energies Marketing Uganda Limited v Uganda Revenue Authority (TAT Application No. 104 of 2023)
  • UETCL v URA (HCCS No. 423 of 2010)

Full judgment

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

Union Logistics Uganda Limited v Uganda Revenue Authority 2026 UGTAT 30 (8 May 2026)
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.