THE Tax Appeal Board has ruled in favour of a local meat processing company in a long-standing dispute with the Board of Inland Revenue (BIR) over the Value Added Tax (VAT) rating for its chicken-based products.

In a landmrk decision delivered by the board’s chairman Anthony Gafoor and board member Roland Hosein, the tribunal quashed the BIR’s VAT assessments for the period February 2015 to January 2016, concluding the tax authority erred in classifying the products as standard-rated.

In its appeal, Heat N Eat Ltd contended its products were zero-rated for value added tax (VAT) purposes.

The dispute centered on whether Heat N Eat’s processed chicken items, such as nuggets, marinated tenders, breaded wings, and pizza toppings, qualified for zero-rating under Schedule 2 of the Value Added Tax Act, Chapter 75:06, as amended by Legal Notice No. 365 of 2012. The company argued that these products, although processed and preserved, shared key attributes with other zero-rated goods such as luncheon meat and hams, and therefore fell under the statutory category of “prepared or preserved meat of fowls.”

The board agreed, stating the legal amendment introduced a parallel framework that permitted the zero-rating of certain processed meats, distinct from the regime applying to unprocessed food. The board held that the explicit inclusion of processed items like luncheon meat in the schedule confirmed Parliament’s intention to zero-rate a broader category of preserved meat products.

In support of its appeal, Heat N Eat introduced expert testimony from food technologist Dr Desmond Ali whoi asserted that the company’s products did not contain additives and were comparable in preservation and culinary function to other zero-rated meats. The board described Ali’s evidence as “measured, technically robust, and well-aligned with the statutory framework.”

It also rejected the evidence of the BIR’s VAT monitoring officer, finding the audit evidence to be selective and lacking procedural completeness.

““We are of the view that the inclusion of luncheon meat, smoked meats, prepared fowlm all indisputably processed, within the realm of the second schedule to the VAT Act cnfirms taht processes does not, per se, disqualify a product from zero-rating.

“The statutory text contemplates and accommodates preservation processes beyond freezing or chilling, “the board said.

It also held that Heat N Eat’s products underwent standard industrial preservation, and the use of phosphates served legitimate functional roles, not disqualifying them under food regulations. The board concluded that the company’s products were indistinguishable in use, composition, and labeling from other zero-rated goods.

“The court concludes that the appellant’s goods fall within the same statutory genus as enumerated zero-rated items,” the board ruled. “Accordingly, it is ordered that the VAT assessments be quashed and set aside. The products are declared to be zero-rated supplies.”

Attorney Stefan Ramkissoon represented Heat N Eat Ltd while Ufi Broomes appeared for the BIR at the Tax Appeal Board.