KSM Investments, a local block making company, has filed legal action against the Guyana Revenue Authority, (GRA), over the imposition of additional taxes and duties on imported goods.
According to action filed this month, KSM Investments is seeking a court order which will effectively bar GRA from assessing and imposing a Customs Revised Value taxes inclusive of freight on imported cement.
The application stipulates that the order must be directed to GRA, its officers, servants and/or agents quashing a decision made by Mr. Patrick Hyman, Deputy Commissioner, Customs Excise and Trade Administration, to assess and impose a Customs Revised Value, inclusive of freight, US$111.92 per metric tonnage on five (5) shipments of Portland Grey Cement imported during the period January to March, 2019.
Additionally, the applicant, Mahadeo Panchu, Managing Director of KSM Investments Inc., a cement block making company situated at Lot 8 Good Hope Public Road, East Coast Demerara, Guyana, has asked that the court overturns the decision declared on Customs C72 Declaration Forms is unlawful and unconstitutional, in breach of and contrary to the Customs Act and other relevant laws.
The applicant also wants an or directed to GRA, its officers, servants and/or agents quashing a decision made by the Deputy Commissioner, Customs Excise and Trade Administration, imposing and demanding payment of Short Levied Customs Duty and Taxes to the tune of $16,626,814 for five (5) shipments of Portland Gray Cement imported by the Applicant during the period January to March, 2019.
In his affidavit filed by Attorney Manoj Narayan and associates, Panchu explained that he owns and operates a fully automated factory that manufactures various concrete products, including hollow and vent concrete blocks, concrete pavers, concrete spindles, concrete tiles, and numerous other concrete products at Lot 8 Good Hope Public Road, East Coast Demerara, Guyana.
During the last quarter of 2015, Panchu commenced importing Domicem Portland Grey Cement from the Dominican Republic — the first time this brand of cement was imported into Guyana.
Mr. Panchu became the exclusive agent and sole importer and distributor of the said brand of cement in Guyana; the product was imported both for use in the manufacturing of the products listed above and for resale in Guyana.
The document went on to explain that when Panchu first imported cement into Guyana, the declared value, exclusive of freight, was US$72 per metric tonne. Inclusive of freight the sum was US$89 per metric tonne.
“A total of 2,175 metric tonnes of cement was imported by the Applicant for the year 2015.
However during the years 2016 to 2018, both Panchu’s manufacturing business and resale of cement expanded and grew and as a result, the applicant’s importation of cement also increased significantly.
And in 2018, he imported a total of 24,480 metric tonnes of cement. The declared value in respect thereof was US$68.50 per metric tonne, exclusive of freight charges. Inclusive of freight charges, the sum was US$83.50.”
During this period, as a result of the increase in the quantity of cement purchased and imported, the businessman said that he benefitted from a reduction of the price from the manufacturer, Domicem S.A., of Santo Domingo, Dominican Republic.
Panchu contended, “All payments in respect of the cement imported are made to Sonex International Limited of One Welches, Welches, St. Thomas, Barbados, which company handles all financial transactions in respect of orders, sale, shipping and payments for Domicem Cement.
“All payments by the Applicant to Sonex International Limited are made via wire transfers from Scotiabank in Guyana.”
But sometime in May 2018, Panchu contends that GRA through its officers, servants and/or agents, unilaterally and without any reasonable or justifiable grounds, increased the declared value, exclusive of freight charges, from US$68.50 to US$96.92.
He disputed and challenged the increase in the declared value and a letter dated May, 8 2018, confirming the price as declared by the Applicant was sent by Sonex International Limited to Mr. Lancelot Wills, Chairman, Technical Committee on Customs Valuation, Guyana Revenue Authority.
Despite the said letter, GRA, its officers, servants and/or agents proceeded to assess duties and taxes on the unilaterally increased declared value for all shipments of cement imported by the Applicant for the period May, to December, 2018.
As a result of the unilateral increase in the declared value, the businessman said he was forced to lodge, deposit and pay to the Respondent additional taxes in the sum $44,048,902 for cement imported during the period May to December 2018.
“The payment of the aforesaid additional duties and taxes have resulted in the depletion of the Applicant’s working capital and has caused and continues to cause tremendous financial hardship on the Applicant’s business,” Panchu explained in the document.
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