MIRA in court over MVR 200mn in GST from Dharumavantha deal

Maldives Inland Revenue Authority (MIRA) has filed a case at the Civil Court seeking payment of MVR 200 million in GST in the Dharumavantha Hospital project from its contractor, Singapore's Chang Hua Construction.

The construction of the 25 storey building of the Dharumavantha Hospital was contracted to Chang Hua Construction company during former President Abdulla Yameen's administration. The project cost USD 140 million and the building is currently in use.

Chang Hua Construction submitted a case to the Civil Court where they claimed the USD 140 million is the cost of the project alone and does not include GST, and sought a ruling from the Court that the Maldives' government must bear the costs of GST that the company is expected to pay to State of Maldives.

In March, 2024, Civil Court issued a ruling in the case which stated that, in consideration of the agreement, including the amendments brought to it in 2018, it is evident that the cost of the 25 storey building is set at USD 140 million without including GST or any other taxes. It read that as a result, the Court finds that it is the Government of Maldives that must bear the costs of paying the GST owed by the company to the State of Maldives in relation to said project.

The ruling further ordered the Maldives Government to reimburse within a period of one month the amount of MVR 227,000 that Chang Hua Construction had already paid as GST to the Maldives Inland Revenue Authority (MIRA).

While the State has appealed this ruling at High Court, MIRA has filed a case at the Civil Court seeking MVR 200 million in GST, including fines.

Chang Hua Construction has raised a procedural objection citing the previous Civil Court ruling and stating that it is the Maldives government that should be paying the GST.

However, MIRA claimed in court that as per per previous ruling, GST has to be paid to MIRA by Chang Hua Construction, which will then have the right to claim reimbursement from the Maldives government.

The court ruled on Tuesday that the case can be heard.

The State, meanwhile, has appealed the Civil Court ruling at the High Court. The High Court has also issued an interim order to halt reimbursement of MVR 227,000 paid by Chang Hua Construction as GST.