Posted: Friday, November 23, 2018. 11:43 am CST.
By BBN Staff: At today’s sitting of the House of Representatives, Prime Minister of Belize, Dean Barrow introduced a bill to amend Chapter 63 of the General Sales Tax (GST) Law.
Barrow informed that the amendment will be retroactive. He further explained that the amendment was necessary due to the ruling handed down by the Caribbean Court of Justice (CCJ) on October 12, 2018. (link story here)
The enactment of the amendment will allow GOB to surpass the ruling to compensate Cruise Solutions Ltd. and Discovery Expeditions Ltd for GST collected and their legal fees.
In the case of Cruise Solutions Ltd. and Discovery Expeditions Ltd. v the Commissioner of General Sales Tax and the Attorney General of Belize, the court ruled that since under the Belize General Sales Tax Act, ‘a supply of services that are provided directly in connection with the operation or management of a ship or aircraft engaged in international transport’ is zero-rated for GST purposes, the two companies must be repaid all general sales tax (GST) assessed, charged and collected by the relevant tax authority, from February 2007 to present, plus interest of 6% per annum.
The cruise lines did not pay GST to the tour operators, alleging that the tour operators’ services of supplying tours were zero-rated, taking account of the fact that the cruise lines had not collected any GST from their passengers against which they could offset any GST payable by them. They believed themselves intended to fall outside the net of GST. However, the GST Commissioner insisted that GST was chargeable and the tour operators had to pay this charge.
Both tour operators filed a claim in Belize’s courts seeking a declaration that their services were zero-rated. They also argued that they had been unlawfully charged GST and should be refunded all monies paid to the relevant tax authority with interest.
However, they received an unfavorable ruling in the High Court and the Court of Appeal.
In a majority decision delivered by Justice Hayton, the CCJ said that those courts had taken too narrow an approach to the interpretation of matters covered by the “management or operation” of a ship engaged in international transport.
If the bill is passed in the House of Representatives, it would mean that GOB would free itself from the repayment terms set by the CCJ.
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