The taxman had previously wanted to classify fermented apple fruit concentrate, a raw material used in the manufacture of cider as an alcoholic beverage. However, the Kenya Breweries Ltd has now won a battle against them.

However,  the High Court judge David Majanja upheld a decision of the Tax Appeals Tribunal that found the apple concentrate, which is used in the manufacture of KBL’s Tusker Cider, cannot be classified in the same category as beverages, spirits and vinegar, to attract higher import duty.

According to KRA, they cited that they did a sample test of the concentrate and found it contained alcoholic strength by volume 14.06 percent and as such, considered it to be fermented alcoholic concentrate classified in HS Code 2206.00.90 of the EAC Common External Tariff.

“The tribunal correctly analysed the provisions of the EAC Common External Tariff (CET), the explanatory notes, General Interpretation Rules (GIRs) and evidence on record to come to the conclusion that the apple concentrate was a raw material for the manufacture of cider, an alcoholic beverage,” the judge said.

Consequently, the KBL said the alcoholic fermented apple was imported for manufacturing of its Tusker Cider brand and the taxman had demanded extra taxes of Sh71.5 million after classifying the import under HS Code 2206.00.90.

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According to the business daily, the brewer said the product is widely used in industry to make beverages and the removal of water before shipping reduces the costs of transport, handling and storing.