PanalPina a logistics company was contracted by its clients in the Netherlands for purposes of exporting flowers from Kenya. As any other exporter the company filed claims for Value Added Tax refunds for the months of January 2016 and December 2015 for the sum of kshs 2,221,584 and 2,168,449. The basis of their refund claim was that they were exporters thus their supplies were zero rated, consequently warranting their input tax refund claim. The revenue authority considered this company to be in logistics offering services within Kenya and thus they were not entitled to any refund. Panalpina Airflo objected, but their objection was turned down. Their appeal to the tax tribunal was turned down prompting them to seek redress from the courts. The high court overturned the previous decisions citing the destination principle. The goods in question were destined for consumption far away from Kenya and therefore were export. This decision was based on a very similar previous case pitting Total touch cargo Holland.
For details of the case click the Link – http://kenyalaw.org/caselaw/cases/view/175422