The Kenya Revenue Authority has been ordered to release detained consignments of Jameson whisky after a court blocked the agency from holding the imports over a valuation dispute with Pernod Ricard Kenya.
Justice Wilfrida Okwany also restrained KRA from altering the customs value of the company’s imports for tax assessment while the case remains pending.
Pernod Ricard Kenya went to court after KRA detained a shipment that included Jameson whisky and other products, while demanding nearly Sh700 million in alleged tax arrears.
The tax agency issued a Sh697 million notice in January, covering imports from July 2012 to December 2016. KRA said an audit had pointed to under-declaration of the value of the goods.
In her ruling, Justice Okwany said the application had merit and allowed it as requested. She noted that KRA could still recover any tax it proves is due if it succeeds in the case, but the company would not be able to recover lost sales.
The dispute has already moved to the Tax Tribunal, where Pernod is challenging KRA’s demand to adjust the customs price of the goods for tax purposes.
Pernod said KRA had earlier agreed on July 3 to release four consignments while the matter was being heard, but the arrangement did not go through. The company later returned to court, saying the goods remained detained even after it provided a bank guarantee.
The importer told the court that it was paying heavy warehouse charges and was running low on stock to serve customers.
KRA opposed the application, arguing that the company had benefited from restrictive market conditions as the only dealer, which made it difficult to compare transaction values.
