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FAN MILK GHANA LIMITED v. THE COMMISSIONER GENERAL GHANA REVENUE AUTHORITY

2022

COURT OF APPEAL

GHANA

CORAM

  • HENRY A. KWOFIE, JA (PRESIDING)
  • GEORGE K. KOOMSON, JA
  • RICHARD ADJEI-FRIMPONG, JA

Areas of Law

  • Tax Law
  • Commercial Law
  • Administrative Law

AI Generated Summary

The Court of Appeal, per George K. Koomson JA, reviewed an appeal from the High Court’s Commercial Division that had affirmed a Ghana Revenue Authority (GRA) tax assessment of GH¢7,655,676.22 against an ice cream and dairy products manufacturer. The assessment stemmed from the Appellant’s failure to withhold tax on payments made to its distributors, which the Appellant described as discounts. The central question was whether those payments were discounts (cash or trade) or commissions. Relying on commercial definitions and accounting practice, the Court held that discounts reduce price for prompt or bulk payment and are recorded accordingly, whereas the Appellant’s end‑of‑month percentage payments tied to sales volumes matched commissions paid to agents. Exhibit FM3, titled “TRADE TERMS CONTRACT FOR AGENTS,” and the absence of accounting entries for cash discounts supported reclassification. Applying sections 34, 116(1)(a)(v) and 117(3) of Act 896, and section 92 of Act 915, the Court held GRA’s withholding assessment was justified and dismissed the appeal, affirming the High Court.

JUDGMENT