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Jul 17, 2018

David Gegg’s GST Appeal Case Heard by the CCJ

Nigel Hawke

A peculiar case was argued before the Caribbean Court of Justice today. It boils down to whether or not local tour operators must pay GST though cruise lines are exempted.  At an appeal hearing today, businessman David Gegg, owner of Cruise Solutions Limited and Discovery Expeditions Limited, is arguing that he against paying GST.  In 2012, Gegg avoided jail time when he worked out a payment plan with the Commissioner of GST after a committal warrant for his arrest was issued. In 2011, the businessman was ordered to settle arrears of two hundred and sixty-four thousand dollars in back taxes. Gegg’s Cruise Solutions Limited reportedly owes more than one hundred and eleven thousand dollars while his Discovery Expedition Company owes about one hundred and fifty-two thousand dollars. Gegg was given two months to pay up. He paid about fifty thousand dollars, and lawyered up to challenge the matter. The dispute is whether the ‘tour services provided by the tour operators to passengers from cruise ships visiting Belize are zero-rated under the General Sales Tax Act or are taxable at a rate of twelve point five percent.  In 2014, Supreme Court Justice Sonya Young dismissed Gegg’s claim saying that the tour companies are not exempted nor are the services they provide zero-rated.   The appeal was brought against the Attorney General of Belize and the Commissioner of General Sales Tax who were represented by Solicitor General Nigel Hawke in today’s hearing. Hawke pointed out to the C.C.J. that framers of the General Sales Tax Act did not exclude tour services. In effect, Hawke told the court that while cruise line companies are exempted from paying GST, local companies that provide tour operator services are legally obligated to pay GST.

 

Nigel Hawke, Solicitor General

“You honor I think the Act is very clear. We are not disputing that. Under the regime of this General Sales Tax Act the cruise line are exempt.”

 

CCJ Justice

 “They are exempt from matters related being engages in international travel, international transport.”

 

Nigel Hawke

 “International travel, transport. In relation to the aspect of local tours…”

 

CCJ Justice

“They don’t have to pay? They are exempt from paying Sales tax?”

 

Nigel Hawke

“This is in relations to international transport. What we say in relation to domestic tours, we say that the legislation when you look at it is very explicit in its language. When you look in particular section thirteen of the fourth schedule.”

 

CCJ Justice

“So you are saying that the cruise line is not exempt from ax as far as the tours are concerns so they are obliged to pay up?”

 

Nigel Hawke

“Yes. We say the tour operators who act on behalf with the cruise lines, they have agreements with them, they don’t fall outside of the regime of what the framers of this law were contemplating.”

 

CCJ Justice

“That is not the question. The question is about the cruise line. Is the cruise line exempt under this regime from paying sales tax on these contracts?”

 

Nigel Hawke

“They are exempt from completely from paying sale tax. What we are dealing with here is in relation to the tour operators.”

 

CCJ Justice

“So you saying basically the Cruise Lines are not exempt but the questions then arise whether the supplied services by Cruise Solutions and Discovery fall within the Zero rating in the second schedule, paragraph six.”

 

Nigel Hawke

“Yes your Honor. It all ties in to the fundamental notion of whether those services as we say in section thirteen of the fourth schedule has to be tailored to mean within the domestic fair. Not international services. Transport sorry in that context.”

 

 

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