Nestlé Lanka challenges Customs levies

Thursday, 16 June 2011 01:11 - - {{hitsCtrl.values.hits}}

By S.S. Selvanayagam

The Court of Appeal issued a Writ of Certiorari quashing the order of the Customs seeking Customs duty and other levies on royalty/licence fees from Nestlé Lanka Ltd.

The Bench comprised Justices Sathya Hettige (President) and Anil Goonaratne.

Petitioner Nestlé Lanka contended that it is not obliged to pay Customs duty on the royalties in terms of the Customs Ordinance as the royalties or licence fees are not paid by the petitioner as a buyer either directly or indirectly as a condition of sale of goods to it.

It cited the Director General of Customs and Deputy Director General of Customs K. Ranjan as Respondents.

Sanjeeva Jayawardena with Suren de Silva appeared for the Petitioner. Assistant Deputy Solicitor General A. Gnanathasan appeared for the Respondents.

Petitioner stated that Nestlé SA of Switzerland owns 90.82% of the capital of it and is the beneficial owner of Intellectual Property of the Nestlé Group and the Nestlé SA SPN and Nestec SA have entered into General License Agreements with its subsidies in various parts of the world to proceed with its business.

Petitioner stated there is no license fee or royalties paid to the seller whatsoever on any such sales and the license fees and royalties if any, are paid only on subsequent sales to a third party if effected after the goods have arrived in Sri Lanka.

Petitioner maintained once the seller Nestlé companies abroad sell the products to the petitioner, there is no further contractual relationship between the petitioner and seller abroad.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.