Businessman sues GRA over wrongful classification of Land Cruiser, excessive tax

Cattle farmer and businessman Mohamed Shaw Jahan has filed a lawsuit against the Guyana Revenue Authority (GRA)  over the incorrect classification of his 2020 Toyota Land Cruiser Van in which he is being asked to pay nearly $14 million in taxes and duties.

The vehicle arrived in Guyana from the United Kingdom on December 20, 2020, and is being kept at the John Fernandes terminal incurring storage costs. According to Jahan’s lawyer, Siand Dhurjon, at the time the vehicle was purchased it was classified as a ‘light goods vehicle’, and as such his client should only pay around $1.8 million in taxes and duties to the Government.

However, Dhujon said that the GRA now insists that the vehicle is a passenger vehicle and is demanding that this client pay about $13,890,384 in taxes and duties.

According to Dhurjon, because the Land Cruiser is a special model which only has two seats, two doors, two ventilating windows, a flatbed cargo area to the rear, and a barrier between the cargo area and the driver area, it is ‘exclusively qualified to be a goods vehicle’.

Dhurjon argues that any classification of the vehicle as a passenger vehicle would be an erroneous misclassification and a misapprehension of the Common External Tariff found in Schedule 1 of the Customs Act,  the Harmonised System Classification Codes, and the World Customs Organisation’s Explanatory Notes on the issue.

According to paragraph 15 of Jahan’s affidavit in the lawsuit filed “when a vehicle is permitted to be registered as a goods vehicle, it is granted a very favourable tax treatment – in this case, if the vehicle is classified as a goods vehicle Mr. Jahan should only have to pay $1,871,457 in total duties and taxes to clear the vehicle, however, if classified as a normal passenger vehicle Jahan would have to pay about $13,890,384 in total.”

Jahan explained in his affidavit that he sought to meet with GRA’s Commissioner-General Godfrey Statia over the wrongful classification of the enclosed 2,800cc diesel van as a “vehicle principally designed for the transport of persons.”

But this meeting was never permitted, the businessman said. Instead, he said he was referred to another officer of the GRA who maintained the erroneous position that the vehicle is a passenger vehicle. According to Jahan, a ‘Classification Committee’ of the GRA later sustained such a ruling in a vague letter to him.

Moreover, Jahan’s lawsuit explains to the court that the GRA “has no written policy, guidelines, or information available from their office on what features/criteria they would accept or deny to classify a vehicle as a goods vehicle. The officers, employees, and agents of the GRA would often say what the criteria are but would give contradictory information.”

The matter is fixed for hearing before the Honourable Madam Justice Damon Yonge on April 22, 2021. And Dhurjon deposes that by then, Statia will have to justify the classification of the Land Cruiser as a passenger vehicle and why the vehicle ought not to be classified as a goods vehicle.

Dhurjon has applied to the High Court of the Supreme Court of Judicature for the following orders:

(1.) an order of declaration that the vehicle is ‘a motor vehicle used for the transport of goods’,

(2.) A Declaration that the classification of the GRA/Commissioner-General that the vehicle is a passenger vehicle is arbitrary, ultra vires, unreasonable, irrational, unreasonable, unfair, an abuse of power, unconstitutional, whimsical, capricious, against the Revenue Authority’s own policy and without any legal foundation or authority,

(3.) an order to quash the classification of the vehicle as a passenger vehicle,

(4.) an order of prohibition to forbid any computation of taxes under the drastically higher taxation scheme applicable to a passenger vehicle,

(5.) an order to compel the Commissioner-General to take all steps necessary to recognize, classify and accept the vehicle as a goods vehicle,

(6.) an order of certiorari to compel the Commissioner-General to take all steps necessary to accept the sum of $1,871,457 in total duties and taxes already paid and to clear and release the vehicle to Jahan forthwith,

(7.) an order that the Commissioner-General compensate Jahan for the storage costs owed by him to John Fernandes Ltd. due to the GRA’s unlawful actions,

(8.) an order that the Commissioner-General pay damages and

(9.) an order that the Commissioner-General pay Jahan’s costs of the proceedings.