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Law firm files constitutional case to annul section from GST regulation

Fathmath Shaahunaz
07 October 2020, MVT 17:24
Entrance to MIRA office in Male' City. FILE PHOTO/MIHAARU
Fathmath Shaahunaz
07 October 2020, MVT 17:24

Law firm CTL Strategies LLP filed a constitutional case with the High Court last Thursday, seeking to annul Section 30 of the Goods and Services Tax Regulation.

According to the law firm, the section in question grants Maldives Inland Revenue Authority (MIRA) the "power to assess the amount of tax payable between two unrelated parties if MIRA believes that the value of supply of goods and services supplied is lower than the open market value of such supply".

In a press release, CTL Strategies revealed that, in their case filed at the High Court, they contended that Section 30 of the GST Regulation is ultra vires, which means to be done beyond legal power or authority, as Section 19 of the GST Act does not authorise MIRA to determine the value of supplies made to unrelated parties.

The law firm noted that under Section 19 of the GST Act, MIRA can formulate regulations to determine the value of supply with respect to certain types of transactions, including goods and services supplied to related parties.

The section makes no reference to supplies made to unrelated parties, however.

The contended Section 30 was introduced, following the 16th amendment to the Goods and Services Tax Regulation, which was published on February 29, 2016.

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