CASE WATCH: Tax Tribunal rules on Application of Statutory Provisions Governing Customs Valuation of Imported goods.

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Tax appeal No. 150 of 2015- Bidco Oil Refineries Limited vs. Commissioner of Customs Services

The appellant in this case, Bidco Oil Refineries Limited is a limited liability company incorporated in Kenya carrying out the business of import, manufacture and refining of edible oils and related products. The respondent on the other hand, is a principal officer appointed under the Kenya Revenue Authority Act to collect, manage, and account for Government revenue under the East African Customs Management Act, 2004.

The salient issues in the appeal were whether statutory provisions governing customs valuation of imported goods was properly applied by the respondent and whether the respondent is entitled to demand the extra revenue which amounted to Kshs 1,377,505,28.00.

The Tribunal agreed with the appellant’s contention that the respondent had failed to demonstrate to the Tribunal satisfactorily as to which valuation method it applied in adjustment of the customs value in issue. It held that the sum assured is not equivalent to the cost, insurance, and freight (CIF) and should not be deemed to be the customs value and hence it belongs to a contract of insurance and not the contract for sale of goods.

In simple terms, the customs value of the appellant’s goods should have been made using the price actually paid for the goods and not the sum assured and that the goods had been over insured by 10% as agreed between the seller and the appellant as per industry practice.

Based on the facts above, the tribunal has provided a clear and consistent view of interpretation of the East African Customs Management Act,2004. This will provide guidance on industry practice.

The firm represented Bidco Oil Refineries Limited.

Find the judgement summary below and discussed at

The Dispute Resolution team acting in this case was lead by Senior Partner and Co-Head James Ochieng Oduol, supported by Senior Associate Kenvine Odhiambo.



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