Gov’t ordered to refund T&T beverage company over environmental tax

The government has lost a legal battle with Trinidadian beverage manufacturer S.M. Jaleel & Company Limited and local Subsidiary Guyana Beverages Inc, which the Caribbean Court of Justice (CCJ) yesterday ordered be reimbursed for the application of an environmental tax that was found to be in breach of the Revised Treaty of Chaguaramas.

The CCJ did not, however, specify the amount the government has to repay as it left the aggregate to be quantified by both sides. This has to be done within another month, by which time reports are to be made to the court.

Last year, the companies filed proceedings in the CCJ seeking a refund for payments made under the now-repealed environmental tax.

They were granted special leave to appear as parties before the court for the purpose of filing an Originating Application claiming relief and reimbursement against the Guyana Government, for the breach of the principles of trade liberalisation and free movement of goods envisioned by the Revised Treaty of Chaguaramas establishing the Caribbean Community (Caricom).

The claim for a refund was based on the judgment made by the court in the favour of RUDISA Beverages of Suriname against the Guyana government as a result of the application of the same tax.

Delivering the court’s ruling yesterday afternoon via videoconference from the Trinidad-based regional court, President of the CCJ Sir Dennis Byron said that the tax imposed by the government was discriminatory, as local companies were not subject to paying the tax.

He said, too, that the defence of “passing off” raised by the government could not stand.

Justice Byron explained that contrary to what the Attorney General had advanced on behalf of the government, no mechanisms existed to ensure that the tax is passed directly to and absorbed by the individual consumer.

Williams had previously expressed confidence in what he said was the government’s “team of persons we have assembled who could testify on the question of whether the environmental tax was transferred to the consumers.”

The beverage company’s claim in the taxes was for the period January 1, 2006 to the date of the repeal of the Act in August, 2015.

In arriving at its decision, Justice Byron noted that the court used the judgment it had handed down in the RUDISA Beverages matter as a precedent.

Last year, Surinamese company, RUDISA agreed to accept US$6.22M from the award made to it by the CCJ, after negotiations with the government.

Guyana had owed US$7.72M based on a 2014 ruling by the CCJ, which had found that an environmental tax imposed by the country was in contravention of the Revised Treaty of Chaguaramas.

RUDISA and CIDI Distributor, which distributes the beverages in Guyana, had filed an application with the CCJ alleging that the imposition of the environmental tax by Guyana was a breach of the Revised Treaty.