The Fiji Revenue and Customs Service has been ordered to refund over $1.2 million to the Life Insurance Corporation of India following a Court of Appeal judgment.

The matter relates to remittance tax payments by LICI.

According to LICI, it made after-tax profits of $3.6m in 2008 and $5.3m in 2009 and remitted 5 percent to its head office in India with the other 95 percent credited to its policy-holders in Fiji as bonuses.

LICI had stated in court that since it had remitted only 5 percent to its Head Office in 2012, a little over $192,000 was paid as remittance tax.

However, in January 2014, FRCS wrote to LICI saying over $1.2 million was payable as remittance tax for profits in 2008 and 2009.

The Appeals Court ruled that because LICI had remitted only 5 percent of its profit, the 95 percent paid to policyholders in Fiji cannot be construed as “credited for remittances”.

The Court also ruled that since the monies are paid out to as bonuses, they no longer belong to LICI.

The Appeals Court stated the remittance tax would apply to after-tax profits only if remittances were made.

The judgment delivered by the High court in 2017 was set aside and FRCS was ordered to refund over $1.2m to LICI with $5000 as cost.