Total does not have to pay VAT for the delivery of the cylinders, the Privy Council decides

The money paid by a consumer so that he could use a gas cylinder may not be taxable. This is actually an instruction that the customer can demand at any time. 

This is the conclusion reached by the Privy Council Tuesday, October 25 in the call of the Mauritian subsidiary of French group Total against the verdict of the Court Supreme authorizing the Mauritius Revenue Authority (MRA) to ask him for 15% of the deposit. 

The MRA had justified the puncture of a tax on this item in view of the fact that the total number of customers for gas household does not increased steadily since 1986. Rs 53.5 million in 1996, the group's turnover increased to Rs 72.1 million in 2003. 

For the MRA, the customer will not claim reimbursement of filing, unless stopped to use gas. And, according to the book's account Total, there is almost no redemption in recent years. Thus, the RA asked the group to pay Income Tax Rs 5.6 million for the period May 1999 to May 2004 and a VAT of 9.6 million for 2000-2004. 

Total refused and appealed to the Supreme Court. But his request to reverse this request was denied by Judge Kesho Parsad Matadeen. Hence his decision to appeal against the verdict before the Queen's Privy Council, stating that the deposit is claimed to encourage customers to return the bottles if they ever decide not to use them. 

The Law Lords have therefore reversed the Matadeen trial, considering it null and void. Referring to the judgments dating as far back as 1938 and made in Britain, the Law Lords why Total, represented by Sir Hamid Moolan, Queen's Counsel (QC), does not have to pay the tax. 

In the case of Morley vs Tattersall 1938, deposits were made by customers with a firm selling horses at auction. But when they do not pay the bill, the partners of the firm share the money. 

There can be no tax, according to the ruling at the time, because they have the obligation to repay customers should they occur. The Law Lords also cite a case where the Inland Revenue sought to tax the deposit paid by a customer to a tailor in the sixties. Logically, when a deposit is paid, it does not necessarily mean that the client will pay the bill and it is also possible that claims its filing. 

The MRA, defended by an English QC and a representative of the prosecution, Mr. Rajesh Ramloll, will have to pay the court costs.