Enterprise News
Court of Appeal Bars KRA from Demanding Sh5.6b from Coca Cola
KRA was demanding Sh5.621 billion on account of alleged arrears of excise duty, and interests maintaining that returnable container (bottles and crates) were subject to taxes.
Court of Appeal judges Wanjiru Karanja, Otieno Odek and Sankale Ole Kantai has barred Kenya Revenue Authority (KRA) from demanding Sh5.6 billion in taxes from the international soft drinks manufacturer, The Coca Cola Company.
According to reports by the Standard, KRA had sued the beverage firm under claims that it had not paid its excise duty between 2006 and 2008 on returnable crates and empty soda bottles. Coca Cola had previously lost the case at the High Court prompting them to appeal at the Court of Appeal.
The bottles in question were used by Coca Cola subsidiaries – Mount Kenya Bottlers, Rift Valley Bottlers, Nairobi Bottlers, and Kisii Bottlers between the two years.
It is from the said containers that KRA was demanding Sh5.621 billion on account of alleged arrears of excise duty, and interests maintaining that returnable container (bottles and crates) were subject to taxes.
According to Coca Cola,the returnable containers are solely used for packing and distributing liquid soda and remain its property hence they ought not to be subjected to tax as they are not the manufacturers of the said containers.
The soft drinks manufacture told the court that deposits paid by its distributors on purchase of the liquid soda was security to ensure that the distributors returned the containers.
In its argument, KRA had said that tax audits revealed that the returnable containers were sold to distributors, adding that the beverage firm’s invoices showed that ownership passed to the distributors.
