Chinese businessman wins judgement against GRA

…after GRA blocked importer from filing tax returns

The High Court has ruled in favour of Chinese importer Shanglin Lin, who had taken the Guyana Revenue Authority (GRA) to court to challenge the tax authority’s reassessment of its duties and determination that it owed $5.7 million extra on imported diapers.
According to the court documents seen by this publication, Shanglin is an importer of adult and children’s diapers of the “Prime Diapers” brand from China. He is in fact the sole importer of Prime Diapers.

The court head that Shanglin was blocked by the GRA from making electronic filings. This came after GRA sent the importer a letter in January 2020, demanding that Lin pay $5.7 million in duties on several containers of diapers that were imported the previous year but which, because of mistakes, had to be reassessed.
According to the letter, which was signed by the Deputy Commissioner of Customs, Excise and Trade Patrick Hyman, Lin had up to two weeks to make the additional payment. When Lin, who had already sold the products wholesale and retail, did not make the requested payment, he was blocked from electronically filing his tax declarations to GRA.
“Prior to receiving the letter dated 3rd January 2020 he was not required by the Respondent to submit any additional invoices or other documents regarding the imported items, informed by the Respondent that there was any error, mistake or other query regarding the declared value of the imported items or the duty or taxes payable thereon, informed of the reason or basis for the imposition of the additional duties and taxes or afforded any opportunity to be heard or given a hearing prior to the decision to demand additional duties and taxes,” the court documents explained.
“The letter of demand indicated that the demand was premised on “anomalies” and listed transactions going back to January 2019 for which duty was already fully assessed by the Respondent and paid. The letter failed to identify any of the anomalies and also failed to state how the additional duties and taxes were calculated or what legal principles were used to compute same but indicated that the Post Clearance Unit could be contacted.”
It was explained that Shanglin sought a review of GRA’s decision through its channels, but his requests were denied. However, GRA in its submissions argued that Shanglin was informed that his consignments were being reviewed prior to the January 3 letter.
Additionally, GRA explained that a post clearance audit was done that showed that the declared values for the diapers and soap powders Shanglin imported was below the standard value. According to GRA, its actions were at all times within the scope of the Customs Act Chapter 82.01.
In her ruling, High Court Judge Fidela Corbin-Lewis ruled in Shanglin’s favour and ordered GRA to pay costs to the importer. According to the Judge, GRA has failed to establish any statutory basis for reassessing the importer’s duties. The Judge decided that there was no statutory basis for the methodology used, which involved value comparisons between Prime Diapers and diapers imported by another company.
“It is therefore ordered as follows: (1) The decision contained in the Respondent’s letter dated 3rd January 2020 assessing and demanding that the Applicant pay $5,763,755 is quashed on the grounds that the said decision is unlawful, unfair, ultra vires and in breach of the Customs Act Cap 82:01 and subsidiary legislation,” the Judge said in her ruling.
“The decision made by the Respondent on or about 1st September 2020 blocking the Applicant from uploading documents to its electronic processing system, ASYCUDA, is quashed on the grounds that the said decision is unlawful, unfair, ultra vires and in breach of the of the Customs Act Cap 82:01,” the Judge also informed, adding that GRA must pay costs and that the matter is adjourned to February 1, 2022 for an assessment of these costs. (G3)