Judgment summary
The Appellant, Coca-Cola Beverages Ltd, appealed against an Objection Decision of the Commissioner of Domestic Taxes dated 15th December 2025, which had rejected its claim for input VAT of Kshs 69,756,165.00 incurred in January 2025.
The Appellant had inadvertently omitted this input VAT from its original July 2025 VAT return and later filed an amended July 2025 return on 20th August 2025 to include it. The Respondent disallowed the claim on the basis that it ought to have been claimed by 31st July 2025 and issued a Rejection Notice on 19th September 2025.
The Tribunal considered whether the Respondent was justified in rejecting the input VAT claim, framed around the proper interpretation of Section 17(2) of the VAT Act, 2013. The Tribunal held that the six-month window ran from the end of the tax period in which the supply occurred, being 31st January 2025, and lapsed on 31st July 2025, regardless of when the relevant return was due for filing under Section 44(1).
The Tribunal found that because the input VAT was completely omitted from the original July 2025 return and introduced for the first time via an amendment filed on 20th August 2025, this fell outside the statutory six-month timeline. The appeal was dismissed and the Objection Decision upheld, with each party bearing its own costs.
Background
The Appellant is a limited liability company incorporated in Kenya (paragraph 1). The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act, Cap 469, Laws of Kenya, mandated with assessment, collection and administration of tax revenue (paragraph 2).
The Appellant inadvertently omitted input VAT of Kshs 69,756,165.00, incurred in January 2025, from its July 2025 VAT return. It filed an amended July 2025 VAT return on 20th August 2025 to include the omitted input VAT (paragraph 3).
The Respondent disallowed the January 2025 input VAT, stating it ought to have been claimed by 31st July 2025, and issued a Rejection Notice on 19th September 2025 (paragraph 4). The Appellant filed a Notice of Objection dated 27th October 2025, contending that the Respondent had misinterpreted Section 17(2) of the VAT Act (paragraph 5).
The Respondent issued its Objection Decision by letter dated 15th December 2025 (paragraph 6). Aggrieved, the Appellant filed its Notice of Appeal dated 27th January 2026 (paragraph 7), and its Memorandum of Appeal dated 6th February 2026 (paragraph 8).
Core dispute
The dispute centred on the correct interpretation of Section 17(2) of the VAT Act, 2013, specifically whether the six-month window for deducting input VAT incurred in January 2025 ended on 31st July 2025 or extended to 20th August 2025, the statutory filing due date for the July 2025 return under Section 44(1) of the VAT Act (paragraph 62).
The Appellant argued that Section 17(2) anchors the six-month period to the tax period in which the supply occurred, not to the date on which the return is filed, and that a return filed within its lawful filing timeline remains a return for the relevant tax period, such that the amended July 2025 return, though filed on 20th August 2025, related to the July 2025 tax period which fell within the six-month window (paragraphs 13 to 19).
The Appellant further argued legitimate expectation arising from the i-Tax system's acceptance of the amendment, and that disallowance created an operational absurdity offending VAT neutrality and Article 47 of the Constitution (paragraphs 33 to 47).
The Respondent maintained that the six-month period ran from the end of the tax period in which the supply occurred, being January 2025, and lapsed on 31st July 2025, so that the input VAT introduced for the first time via the amendment filed on 20th August 2025 fell outside the statutory window (paragraphs 50 to 55).
Court findings
The Tribunal identified a single issue for determination: whether the Respondent was justified in rejecting the Appellant's input VAT claim of Kshs 69,756,165.00 (paragraph 58).
The Tribunal held that the end of the tax period for purchases made in January 2025, considering the six-month window under Section 17(2) of the VAT Act, would be 31st July 2025 (paragraph 64).
The Tribunal distinguished the situation where an amount already included in an earlier return is later corrected in an amended return, from the Appellant's situation where the input VAT was completely omitted from the July 2025 return and introduced for the first time through an amendment filed on 20th August 2025, which the Tribunal found to fall outside the statutory timelines envisaged under Section 17(2) (paragraph 65).
The Tribunal found that the six-month period runs from the period in which the supply or importation occurred and does not depend on when the VAT return was filed, and that the fact the July 2025 return was itself due on 20th August 2025 did not extend the six-month period to that date (paragraph 66).
Consequently, the Tribunal held that amending the VAT return would be inconsequential, as the input VAT was not claimable, the six months having lapsed (paragraph 67), and found that the Respondent was justified in rejecting the Appellant's VAT claim of Kshs 69,756,165.00 (paragraph 68).
Outcome
The Tribunal held that the appeal lacked merit and dismissed it (paragraph 69(a)). The Respondent's Objection Decision dated 15th December 2025 was upheld (paragraph 69(b)). Each party was ordered to bear its own costs (paragraph 69(c)).
Major issues / areas of contention
- Whether the Respondent was justified to reject the Appellant's input VAT claim of Kshs 69,756,165.00.
- Whether the six-month window under Section 17(2) of the VAT Act runs from the end of the tax period in which the supply occurred or from the date the relevant return is due for filing.
- Whether input VAT completely omitted from an original return can be validly introduced for the first time through an amended return filed after the six-month window has lapsed.