In pursuant to Section 2 of the VAT Act, 2013 a zero-rated supply is defined to
mean a supply listed in the Second Schedule to the Act and the institutions which
enjoy supply of goods and services that are zero-rated are listed under Part B of the
said Second Schedule to the Act. It is not in dispute that the British Army Training
Unit in Kenya (BATUK) is not one of the institutions listed as to enjoy zero rated
supply under the Part B of the Second Schedule to the VAT Act, 2013.

1. Given that the disallowing of the refund arising on account of
supplies to the BATUK and charging of VAT on the same are not
based on the law, we pray that this Honorable Tribunal sets aside
the assessment in this regard amounting to Kshs. 15,244,135/=.

The Tribunal finds in the circumstances that the constructions services rendered by
the Appellant to the British Army Training Unit in Kenya (BATUK) in 2014 were
chargeable to VAT and the assessment of VAT in respect of the invoices raised by
the Appellant to the British Army Training Unit in Kenya (BATUK) for the
constructions services rendered in the Respondent's letter dated 3rd June, 2015 was
appropriate. The assessed sum of Kshs. 15,244,135/= plus the accrued interest and
penalties thereon is payable by the Appellant.

The Tribunal upholds the assessment of VAT by the Respondent and accordingly
finds that the Appeal has no merit and proceeds to dismiss the same with no order
as to costs.