COMMISSIONER GENERAL OF INLAND REVENUE

COMMISSIONER GENERAL OF INLAND REVENUE

Vs.

RHINO ROOFING PRODUCTS LTD

COURT OF APPEAL
DR. FERNANDO, J.
WIJERATNE, J.
CA/TAX/7/2019
TAC/VAT/002/2015
FEBRUARY 25, MAY 4, 2021

Tax Appeals Commission Act, No. 23 of 2011-Case stated-Value Added Tax Act, No. 14 of 2002, sections 5(1), 25, 83-Post-sale discounts-Principle of neutrality-Open market value-Adjustment procedure for VAT registered and non-VAT registered customers

The respondent was engaged in the business of manufacturing and supplying roofing sheets. The respondent issued invoices for the value of the supply at a discounted rate at the time of supplying roofing sheets to its dealers. At the end of each month, the dealers were given a further discount ranging from two to ten per cent as an incentive, based on the total value of their purchases during the month (quantity discount). The respondent's Value Added Tax (VAT) returns were not accepted by the assessor on the basis that quantity discounts to dealers were not allowable in determining VAT in terms of the Value Added Tax Act, No. 14 of 2002, as amended (VAT Act). The assessor proceeded to issue an assessment

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