The Court of Appeal has given judgment in favour of the Service in the celebrated case of Vodacom Business Nigeria Ltd. Vs Federal Inland Revenue Service on payment of VAT on imported service.
In that case Additional VAT assessment was issued against the company in respect of transactions which the company had with a non resident company for the supply of satellite bandwidth to the company. The company objected and contended that the principle of reverse charge and the destination principle were not part of Nigerian law. They also argued that a service supplied by a non resident company to a person inside Nigeria is only liable to VAT if the supplier of the service is physically present in Nigeria. We submitted that under Sections 2 and 10 (2) of the VAT Act any supply of service in Nigeria is liable to VAT. For a better understanding of the full judgment, please forward your request to the Legal Department.
This is a landmark judgment which will lead to increase in revenue.
