RULING OF THE COURT
The central issue in the intended appeal is whether services offered by the respondent, Panalpina Airflo Limited through its agent or client, Panalpina Airflow BV, a company incorporated in the Netherlands which offers transport, logistical and freight services are subject to withholding tax. Those services also include x-raying of flowers to verify their particulars as set out by exporters; vacuum cooling of the flowers to ensure they are moist free prior to exportation; cold room packing and storage of the flowers in accordance with airline specifications; and preparation of documentation necessary for the export of flowers.
The respondent claimed that those services were zero-rated under the Value Added Tax Act but the applicant, COMMISSIONER OF DOMESTIC TAXES, did not agree.
When the respondent applied for VAT refunds in various sums the applicant insisted that the respondent pay tax. The respondent filed an objection under the VAT Act and the dispute ended up at …