.png)
.png)
The taxpayer company, Total, supplied liquefied petroleum gas to customers in Mauritius.
All customers had to pay deposits in respect of the bottles or containers in which their gas was stored.
Total argued the deposits were not liable to income tax or VAT. The Mauritius Revenue Authority disagreed, and the case progressed to the Privy Council.
The Privy Council said the deposits held by Total were security deposits rather than consideration for the supply of goods or of services and were therefore not chargeable for VAT.
Every new deposit was received on the basis that it was refundable when the customer returned and did not replace the containers used to hold gas.
At no point did the legal nature of deposits change so as to convert it into a trading profit.
The taxpayer company’s appeal was allowed.
