Coca-Cola Beverages Ltd has lost a Sh69.7 million input value-added tax (VAT) claim from the Kenya Revenue Authority (KRA) after a tribunal ruled that the company introduced the claim 20 days after the statutory six-month deadline.
The Tax Appeal Tribunal observed that the beverage firm filed its VAT claim on August 20, 2025, way past the statutory July 31, 2025 deadline.
Consequently, the Tribunal dismissed the beverage manufacturer’s appeal against the KRA’s Commissioner of Domestic Taxes and upheld the tax decision rejecting the claim.
It held that the six-month statutory period runs from the end of the tax period in which the supplies occurred and is not extended by the filing deadline for a subsequent VAT return.
The dispute started after Coca-Cola omitted input VAT of Sh69.7 million incurred on taxable purchases made in January 2025 from its original July 2025 VAT returns.
The company later sought to introduce the claim by filing an amended July return on August 20, 2025, adding the January invoices. It argued that the return still related to July, a tax period falling within six months of January.
The Commissioner rejected the amendment, saying the invoices should have been claimed by July 31. Coca-Cola objected, but the Commissioner maintained the position.
Coca-Cola then appealed to the Tribunal, arguing that Section 17(2) of the VAT Act allows input tax deductions within six months after the end of the tax period in which supplies occurred.
The company argued that July’s return was legally due on August 20, meaning the amendment was filed within the lawful filing period.
Coca-Cola also said the January invoices were genuine, supported by records and incurred wholly for making taxable supplies. It maintained that the amendment corrected an omission rather than introducing a fresh claim outside the law.
‘The amendment did not introduce a new claim outside the statutory window but merely corrected the July 2025 return,’ the company submitted.
It further argued that KRA’s i-Tax system had accepted the amended entries, creating a legitimate expectation that the claim complied with the statutory requirements.
The Commissioner, however, maintained that the six months concerned when input tax was claimed, rather than when the relevant return was due. It said the deadline expired on July 31, regardless of the August filing date.
KRA also argued that taxpayers were not permitted to introduce a claim after the deadline merely because the return concerned an earlier tax period.
In its ruling, the Tribunal agreed with KRA after examining the competing submissions and statutory wording. It found there was a distinction between correcting a claim already included within time and introducing an omitted claim after the deadline.
‘The six-month period runs from the period in which the supplies/importation occurred and does not depend on when the VAT return was filed,’ the Tribunal said.
It found that Coca-Cola had completely omitted the amount from its original July return. Introducing it through the August amendment therefore occurred after the statutory period had lapsed.
According to the Tribunal, an amendment cannot revive a claim first introduced after the deadline.
The Tribunal added that the outcome could have differed if the amount had already been included before July 31 and the amendment merely corrected an error.
‘Had this amount been included in the July return but for some reason be erroneous, then it would have been safe to be included in the amended return,’ it said, placing responsibility on taxpayers to reconcile returns before the statutory window closes.