Wakilii

Wipro Technologies South Africa PTY Limited v Uganda Revenue Authority (Application 165 of 2020 Application 5 of 2021)

Tribunal · [2022] UGTAT 29 · 2022 Application Partly Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Applications for review of VAT assessment and refund claim consolidated before the Tax Appeals Tribunal
Decision
Application partially allowed with VAT refund granted for credit notes but input VAT claim rejected for lack of proof of payment

Observed later treatment

No later-treatment classification is recorded for this judgment.

Citator coverage is limited to judgments in the Wakilii corpus and source-matched treatment records. Absence of a signal is not an assertion that the case remains good law.

AI-generated summary. This summary was generated by AI from the full text of the judgment. It may contain errors or omissions—always read the source judgment before relying on it.

Holding

The Tribunal held that credit notes issued to correct invoices addressed to the wrong party (MTN Uganda Limited instead of MTN Sea Shared Services Limited) were bona fide and valid under s.22 of the VAT Act where the nature of supply was fundamentally varied. The applicant was entitled to a VAT refund of US$ 471,488.855. However, the claim for input VAT credit of Shs. 197,561,475 failed because the applicant did not provide receipts or proof of payment, only bank statements insufficient to verify the transactions.

Outcome

Application partially allowed with VAT refund granted for credit notes but input VAT claim rejected for lack of proof of payment

Facts

The applicant, a Ugandan branch of Wipro South Africa, applied for VAT refunds of Shs. 1,144,539,328 for March 2014 to October 2019. URA conducted a refund audit, disallowed the input tax credit, and raised an assessment of Shs. 1,557,626,815. The dispute concerned two issues: (1) disallowed credit notes of Shs. 1,316,082,094 issued to MTN Uganda Limited and MTN Sea Shared Services Limited, which the applicant claimed were issued to correct invoices wrongly addressed to MTN Uganda Limited when the contract was with MTN Dubai Limited (later replaced by MTN Sea Shared Services Limited); and (2) disallowed input VAT of Shs. 197,561,475 on vendor purchase invoices which URA rejected because suppliers did not disclose them in their VAT returns. The applicant provided a matrix showing invoices and corresponding credit notes. For the input VAT claim, the applicant tendered invoices, tax returns, and bank statements but no receipts or proof of payment.

Issues

  1. Whether the applicant is liable to pay the VAT assessed by the respondent in respect of disallowed credit notes totaling Shs. 1,316,082,094.
  2. Whether the applicant is entitled to input VAT credit of Shs. 197,561,475 where the suppliers did not disclose the invoices in their VAT returns.
  3. Whether credit notes issued to MTN Uganda Limited and MTN Sea Shared Services Limited were validly issued under the Value Added Tax Act.

Orders

  • Application partially allowed.
  • Applicant entitled to VAT refund of US$ 471,488.855 or its equivalent in Uganda Shillings but not more than what was stated in the VAT returns.
  • VAT assessment in respect of the allowed amount set aside.
  • Respondent ordered to refund 30% in respect of the said assessment as adjusted.
  • Applicant not entitled to input VAT of Shs. 197,561,475.
  • Assessment in respect of Shs. 197,561,475 stands.
  • Applicant entitled to costs of the amount allowed.

Rules and key headnotes

Value Added Tax — Credit Notes — Bona Fide Issuance — Fundamental Variation of Supply
A credit note is validly issued under s.22 of the VAT Act where the nature of the supply has been fundamentally varied or altered, including where invoices were issued to a party not entitled to receive the supply under the contract, and the credit note is issued bona fide to correct the error.
Value Added Tax — Credit Notes — Bona Fide Test
For VAT purposes, the duty of the Commissioner and the Tribunal is to satisfy themselves that a credit note has been issued bona fide in order to correct a genuine mistake or overcharge; if this test is not satisfied, the credit note is for a false purpose and is void as being contrary to public policy.
Value Added Tax — Input Tax Credit — Burden of Proof — Proof of Payment
To claim input VAT credit under s.28 of the VAT Act, a taxable person must prove: (1) that they are a taxable person; (2) that taxable supplies were made to them during the tax period; and (3) that the supplies were for use in their business. Bank statements alone, without receipts or proof of payment identifying the supplier, invoice, and nature of supply, are insufficient to discharge the burden of proof.
Value Added Tax — Input Tax Credit — Supplier's Failure to Remit VAT
It is not the duty of a taxpayer claiming input VAT credit to ensure that the supplier remitted the VAT to the revenue authority; where the taxpayer has paid VAT to the supplier and filed returns, the revenue authority must pursue the supplier for any VAT not remitted.
Documentary Evidence — Receipts — Proof of Payment in Tax Disputes
A receipt is essential evidence in tax disputes as it states the address of the supplier, enables the revenue authority to trace input VAT, and confirms that the supplier used a portion of the payment to pay VAT; in the absence of receipts or other proof of payment, bank statements that do not identify the payee, invoice, or nature of supply are insufficient.

Legislation cited (25)

Cases cited (10)

  • DHL Supply Chain International Ltd v Uganda Revenue Authority (Application 59 of 2019)
  • British United Shoe Machinery Co. Ltd (1977) 1 BVC 1062
  • Target Well Uganda Limited v Uganda Revenue Authority (HCCS No. 751 of 2015)
  • East African Investment v Uganda Revenue Authority (Application 6 of 2019)
  • Temple Gothard & Co. No. 702
  • Kinyara Sugar Ltd v Commissioner General Uganda Revenue Authority (HCCS 73 of 2011)
  • Mangin v Inland Revenue Commissioner [1971] ALLER at 182
  • Margaret Rwaheru Akilki & 13945 Others v Uganda Revenue Authority (Civil Suit 117 of 2013)
  • Manilla North Tollways Corporation v Commissioner of Internal Revenue C.T.A EB No. 812 of 2012
  • Enviroserv (U) Ltd v Uganda Revenue Authority (Application 24 of 2017)

Full judgment

↓ Download PDF

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

Wipro Technologies South Africa PTY Limited v Uganda Revenue Authority (Application 165 of 2020 Application 5 of 2021) 2022 UGTAT 29 (29 September 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.