In a ruling issued on Friday, the High Court of Demerara ordered SOL Guyana Incorporated to pay over $2.1 billion in excise taxes to the Guyana Revenue Authority (GRA), after finding that the fuel importer had improperly withheld a large quantity of tax-exempt fuel intended for ExxonMobil’s local operations.
Justice Nareshwar Harnanan delivered a 14-page judgment, concluding that SOL breached the terms of a tax exemption arrangement linked to a Production Sharing Agreement (PSA) between ExxonMobil Guyana (formerly Esso Exploration and Production Guyana Limited) and the Government of Guyana.
The case concerned a 2020 shipment of 202,829,427 litres of fuel that SOL imported under the PSA, which granted a reduced excise tax rate of 10 percent—down from the standard 50 percent—for fuel used in petroleum operations.
However, GRA audits revealed that only 147,950,610 litres were delivered to ExxonMobil, leaving 54,878,817 litres unaccounted for.The GRA argued that SOL, while authorised to import fuel on ExxonMobil’s behalf, was not entitled to independently benefit from the tax exemption.
The agency said the undelivered fuel no longer qualified for the tax break and demanded $2,196,908,802 in unpaid excise taxes. Multiple notices were sent, but SOL did not pay, prompting the court action by GRA.
SOL countered that they operated within a system allowing retroactive tax exemptions and attributed the shortfall to administrative confusion and GRA’s software transition. They also claimed that past practices led them to believe exemptions could be recovered retrospectively.Justice Harnanan rejected these explanations.
He ruled that SOL’s tax exemption rights were strictly tied to the delivery of the full fuel consignment to ExxonMobil. He pointed to documentary evidence, including a February 2021 letter from SOL and a certified reconciliation report from ExxonMobil’s Logistics Manager, confirming the exact amount of fuel delivered.“SOL Guyana was never the beneficiary of the PSA tax exemption.
It acted solely as an authorised importer,” the judge said. “Its retention of a portion of tax-exempt fuel—under the belief it could self-apply exemptions retroactively—was improper and impermissible.”The court also dismissed SOL’s late-stage argument that it had a “legitimate expectation” of ongoing exemptions based on past GRA practices.
Justice Harnanan found this claim unsubstantiated and inadmissible, noting it had not been formally pleaded or supported by evidence.Additionally, SOL’s counterclaim seeking a refund of $278 million in what it alleged were overpaid taxes was thrown out.
The judge said this claim was grounded in an incorrect assumption of entitlement to the exemption.Justice Harnanan ordered SOL Guyana to pay the full $2.1 billion in excise taxes, plus six percent interest annually from the date the lawsuit was filed until the date of judgment.
Thereafter, interest will accrue at four percent per annum until full payment. The company was also ordered to pay $3 million in legal costs by July 31, 2025.GRA was represented by in-house counsel Jason Moore, while attorneys Nigel Hughes and Stephen Roberts represented SOL Guyana.
