Principle(s):

A private ruling as per Section 80 of the VAT Act stays in force unless overturned by a competent authority as provided by law.

Brief facts:

The Applicant brought this appeal against URA arguing that the VAT assessments issued on account of the supply of coffee husk and palm kernel to Hima Cement Limited against the Plaintiff was illegal and that the tax collection enforcement measures invoked by the defendant were unlawful. The appellant wrote to the respondent as per section 80 of the VAT Act on the 2nd of April 2015 inquiring whether the supply of coffee husk and palm kernel fell under Section 19 (1) of the VAT Act. The respondent replied on the 26th April 2015 confirming that this supply fell within the ambits of the provision.

Holding:

The supply of palm kernels and coffee husks is exempt as provided by Section 19(1) and Para 1(a) Second schedule of the VAT Act.

The private ruling binds the Commissioner general with respect to the application to the transaction and since it had not been reversed, it remained binding and informed the position of the Plaintiff’s liability.