27 June, 2019
In a recent tax case, Bridgestone Chemical Products (M) Sdn Bhd ("taxpayer") v Minister of Finance and Director General of Customs and Excise, the taxpayer succeeded in its judicial review application challenging the Minister of Finance’s ("MOF’s") refusal to grant a remission on the sales tax, import duties and goods and services tax imposed by the Director General of Customs and Excise ("Customs").
This stemmed from Customs’ refusal to grant an import duty exemption ("exemption") to the taxpayer for the period from 6 January 2015 to 31 May 2015 ("the omitted period"). Customs had granted an exemption for the period commencing 1 June 2015. However, the taxpayer contended that, as the previous exemption had expired on 5 January 2015, Customs had made a typographical error in its approval and the exemption should have commenced on 6 January 2015, not 1 June 2015. The taxpayer had also been granted similar exemptions for a continuous and uninterrupted period of more than two decades.
The High Court allowed the taxpayer’s judicial review application, quashed the MOF’s refusal to grant the remission and held that the taxpayer was not liable to pay the said duties and taxes. Crucially, the High Court also held that the taxpayer is entitled to the exemption for the omitted period and compelled Customs to issue the correct exemption.
This case is important as it deals with errors made by Customs when issuing exemptions and the consequences that flow therefrom. It confirms that tax authorities can be compelled to rectify their own errors and grant the correct exemption even where such errors are vehemently denied. MOF and Customs have filed an appeal against the High Court’s decision.
For further information, please contact:
Irene Yong, Partner, Shearn Delamore & Co
irene.yong@shearndelamore.com
