High Court orders SOL Guyana to pay over $2.1B in excise taxes to GRA

– Justice finds company improperly withheld tax-exempt fuel intended for ExxonMobil

The High Court has ordered petroleum importer SOL Guyana Incorporated to pay the Guyana Revenue Authority (GRA) over $2.1 billion in excise taxes, after ruling that the company wrongfully held back a large quantity of tax-exempt fuel that should have been delivered to ExxonMobil Guyana.
The ruling was handed down on Friday by Justice Nareshwar Harnanan, who found SOL in breach of its obligation to deliver a full consignment of fuel imported under a special tax arrangement linked to the oil giant’s operations. In his 14-page judgment, the judge concluded that SOL retained 54,878,817 litres of fuel that had been exempted from the standard excise rate under a Production Sharing Agreement (PSA) between ExxonMobil and the Government of Guyana.
That PSA entitled ExxonMobil to a reduced excise rate of 10 per cent on fuel imported for petroleum-related activities. However, SOL, who acted as the importer on ExxonMobil’s behalf, delivered only 147,950,610 litres out of a total 202,829,427 litres it brought into the country in 2020 under the tax-exempt arrangement, according to court records.
Following a review of fuel reconciliation documents and a subsequent audit, the GRA determined that the undelivered volume no longer qualified for the exemption and assessed taxes on the shortfall, amounting to $2,196,908,802.
In court, the GRA maintained that SOL was never entitled to the tax relief in its own right, and was merely the conduit for importing the fuel on behalf of ExxonMobil. The GRA said that by retaining the excess, SOL violated the terms of the exemption and, despite several notices, failed to pay the taxes owed.
SOL, in its defence, argued that it had complied with tax obligations and operated under an administrative framework in which exemptions could be applied retroactively after internal reconciliations. The company also pointed to software changes at the GRA in 2019 and internal delays as reasons for its actions, suggesting that there was precedent for recouping taxes through future exemption letters.
But Justice Harnanan dismissed those explanations, stating, “While [SOL Guyana Incorporated] may have encountered legitimate administrative uncertainty, it does not follow that it was lawfully entitled to unilaterally retain a portion of tax-exempt fuel under the guise of a self-directed ‘recoupment’ mechanism.”
The court placed heavy weight on documentary evidence presented by the GRA, including a February 22, 2021 letter from SOL and a certified report from ExxonMobil’s Logistics Manager confirming the volume received.
Justice Harnanan found that the remaining fuel could not be shielded under the tax waiver and ruled that SOL’s actions amounted to an “improper and unauthorised retention of tax-exempt fuel.”
He was also clear that SOL’s eligibility for any such tax relief depended strictly on express authorisation from the GRA, which had only been granted for the fuel destined for ExxonMobil. “As previously established, the defendant’s ability to benefit from tax exemptions, derived solely from the express authorisation of the claimant,” the judge wrote.
In rejecting SOL’s argument of “legitimate expectation,” the court noted that the issue was not raised in SOL’s pleadings and lacked evidentiary support. SOL had contended that because the GRA had previously issued retroactive exemptions, it had reason to expect that similar relief would be granted in this case, even though the practice stopped following the GRA’s switch to a new customs software system in 2019.
But Justice Harnanan concluded that this line of argument could not stand, noting it was improperly introduced only in final written submissions.
SOL had also filed a counterclaim seeking a refund of $278,341,888 in what it claimed were overpaid taxes, but this too was dismissed by the judge, who ruled that the claim stemmed from “the erroneous belief of an entitlement to the tax exemption.”
Ultimately, the court ordered that SOL Guyana pay the full $2.19 billion in excise taxes, along with interest at six per cent annually from the time of filing until the judgment date, and four per cent thereafter until the amount is paid off. Additionally, SOL must pay $3 million in fixed costs to the GRA by July 31, 2025.
Attorney-at-Law Jason Moore, the in-house counsel for the GRA, appeared on behalf of the agency, while attorneys Nigel Hughes and Stephen Roberts represented SOL Guyana.