Case Reference: Coca-Cola Beverages Ltd v Commissioner of Domestic Taxes (Tax Appeal E146 of 2026) [2026] KETAT 346 (KLR) (11 September 2026) (Judgment)
The Background
Coca-Cola Beverages Ltd incurred input VAT of Kshs 69,756,165.00 in January 2025 on taxable supplies acquired wholly and exclusively for the purpose of making taxable supplies . Owing to an inadvertent omission, this input VAT was not reflected in the original July 2025 VAT return . The company subsequently filed an amended July 2025 VAT return on 20th August 2025—the statutory due date for filing the July 2025 return—and included the previously omitted January 2025 input VAT .
The Commissioner of Domestic Taxes disallowed the January 2025 input VAT, stating that it ought to have been claimed by 31st July 2025 . A Rejection Notice was issued on 19th September 2025, and following an objection by the Appellant, the Commissioner issued its Objection Decision on 15th December 2025 . Aggrieved, Coca-Cola filed its Notice of Appeal dated 27th January 2026.
The Appellant’s Case
Coca-Cola challenged the Commissioner’s decision on multiple grounds. It contended that the Respondent had misinterpreted Section 17(2) of the VAT Act, 2013, by concluding that the period within which the January 2025 invoices should have been claimed lapsed on 31st July 2025 . The Appellant argued that the amendment application related to the July 2025 return, which fell within the six-month statutory window .
The company further argued that Section 17(2) permits deduction of input VAT in any tax period falling within six months from the end of the tax period in which the supply occurred . It maintained that the statute does not impose a requirement that the claim be made by the last day of the sixth month . Coca-Cola also raised arguments on legitimate expectation, contending that the iTax system’s acceptance of the amended return created a legitimate expectation that the claim would be recognised.
Coca-Cola relied heavily on the High Court’s decision in Highlands Mineral Water Limited v Commissioner of Domestic Taxes [2021] KEHC 12894 (KLR), where the court held that the mere fact that a VAT return was filed late did not extinguish an otherwise timely input VAT claim .
The Respondent’s Case
The Commissioner refuted the Appellant’s allegations, averring that all the disallowed purchase invoices were dated 3rd and 31st January 2025, and that the end of the tax period to which the supplies were made was January 2025.
The Respondent relied on the High Court’s decision in Highlands Mineral Water, which established that the six-month period of claiming input VAT begins to run when the supply or importation occurred, not necessarily when the return is filed. The Commissioner also cited Gracan Construction Limited v Commissioner for Domestic Taxes (2022), where the High Court stated that if a taxpayer files a VAT return seven months after the supply occurred, the input tax claimed cannot be allowed.
The Respondent argued that in this case, the deduction of input tax should have been done within six months—by 31st July 2025—rather than in the return for the period July 2025, which was submitted in August 2025.
The Tribunal’s Analysis
The Tribunal identified a single issue for determination: whether the Respondent was justified in rejecting the Appellant’s input VAT claim of Kshs 69,756,165.00.
The Tribunal examined Section 17 of the VAT Act, 2013, which provides that input tax on a taxable supply may be deducted in a return for the period, subject to the proviso that the input tax shall be allowable for a deduction within six months after the end of the tax period in which the supply or importation occurred.
The Tribunal held that the end of the tax period for purchases made in January 2025, considering the six-month window, would be 31st July 2025. It noted that the Appellant was introducing the VAT input claim on 20th August through an amendment of a return. Had this amount been included in the July return but for some reason been erroneous, then it would have been safe to be included in the amended return of 20th August, as it would not have been the first time it was being introduced. However, from the Appellant’s pleadings, this input VAT was completely omitted in the July 2025 return, and to introduce it for the first time through an amendment of 20th August would be to do so outside the statutory timelines as envisaged under Section 17(2) of the VAT Act.
The Tribunal emphasized that the six-month period runs from the period in which the supplies occurred and does not depend on when the VAT return was filed. The fact that the July 2025 VAT return itself was due on 20th August 2025 did not extend the six-month period to 20th August. Consequently, the Tribunal found that amending the VAT return would be inconsequential as the input VAT was not claimable, the six months having lapsed.
The Highlands Mineral Water Distinction
The Tribunal distinguished Highlands Mineral Water on a critical factual basis. In Highlands, the Appellant had claimed the input VAT in the return for the correct tax period—the month in which the supply occurred—but the return itself was submitted late . The High Court held that the lateness of the return did not, by itself, invalidate the claim, as long as the claim was made in the correct tax period.
In Coca-Cola, however, the position was fundamentally different. The input VAT was not claimed in the return for the tax period in which the supply occurred. It was completely omitted from the January 2025 return and then introduced for the first time by amending a subsequent return—the July 2025 return—on 20th August 2025, by which date the six-month window had already closed on 31st July 2025. The Tribunal’s analysis turned on whether a claim already existed, not on when the return was filed. Since the January purchases had never appeared in the VAT records before the deadline, the August amendment did something more substantial than repair a filing error. It was the first occasion on which the Appellant brought the January input VAT into its tax return.
Implications for Taxpayers
This decision underscores the critical distinction between late filing of a VAT return and late claiming of input VAT. The six-month window under Section 17(2) is a substantive limitation on the right to deduct input VAT, not merely a procedural filing requirement. Taxpayers who omit input VAT from the return for the correct tax period cannot rely on a subsequent amendment to revive the claim after the six-month window has expired.
The decision also highlights the importance of the tax period to which a claim relates. A claim is made through filing, but the filing is a return for a specific tax period. If the input VAT was not claimed in the return for the tax period in which the supply occurred—or in a subsequent return within the six-month window—the claim is time-barred.
The Tribunal’s judgment is consistent with the Kenya Revenue Authority’s own system configurations. The KRA has confirmed that its VAT Auto Assessment system embeds the six-month rule, and in instances where an amendment affects purchase invoice entries whose invoice date is older than six months and twenty days, the system considers such entries to be time-barred and will not validate the return .
Conclusion
The Tribunal dismissed the appeal, upheld the Respondent’s Objection Decision dated 15th December 2025, and ordered each party to bear its own costs. The decision serves as a reminder that the six-month window for claiming input VAT under Section 17(2) of the VAT Act is a strict statutory deadline that runs from the end of the tax period in which the supply occurred. Taxpayers must ensure that input VAT is claimed in the correct return within this window, as a subsequent amendment cannot revive a claim that was never made in time.
