Section 7

Goods and services not liable to excise duty 

Subsections: 1,  2,  3,  4,  5,  6 

(1)

  Subject to this section, no excise duty shall be charged on the following—

• (a) exempt goods which meet the conditions set out in the Second Schedule; 
• (b) excisable goods exported under customs control, including as stores; 
• (c) excisable services exported from Kenya; 
• (d) excisable goods that the manufacturer has destroyed, with the prior written permission of the Commissioner, under the supervision of an authorised officer prior to their removal from the factory in which they were manufactured; 
• (e) denatured spirits for use in the manufacture of gasohol or as a heating fuel; 
• (f) excisable goods that have been lost or destroyed by accident or other unavoidable cause–– 
•   (i) in the course of removal of the goods by the manufacturer from the manufacturer’s factory including when loading or unloading the goods;
•   (ii) in the factory of the manufacturer in which the goods were manufactured before removal from the factory; or 
•   (iii) on board an aircraft or vessel prior to importation into Kenya. 

(2)

  The Cabinet Secretary may by notice in the Gazette, grant remission of excise duty, wholly or partially, in respect of beer or wine made from sorghum, millet or cassava or any other agricultural products, (excluding barley), grown in Kenya.

(3)

  The Gazette notice issued under subsection (2), shall specify the products and conditions to be met for the remissions to be granted.

(3A)*. A notice under subsection (2) of this section shall be laid before the National Assembly without unreasonable delay, and a resolution may be passed by the  National Assembly within twenty-one days on which it next sits after the notice is so laid, that the notice—

(a) be approved; or

(b) be annulled and it shall thenceforth be void, but without prejudice to the validity of anything previously done thereunder, or to the issuing of a new notice.(Finance Act 2021- wef-01July2021*)

(4)

  Excisable services shall be considered to be exported from Kenya if the services are supplied from a place of business in Kenya for use or consumption outside Kenya.

(5)

 Subsection (4) shall apply only if the Commissioner is satisfied that the goods have not been, and shall not be consumed in Kenya. Finance Act, 2018 Effective 1st July 2018  
 An exemption granted under this section shall apply if the Commissioner is satisfied that—

• a) the goods referred to in subsection (1)(a) have been received and consumed by the exempt person; and 
• b) excisable goods or services for export under subsections (1)(b) and (c) have not been, and shall not be consumed in Kenya. Finance Act, 2018 Effective 1st July 2018  

(6)

  Subsection (1)(f)(i) and (ii) shall not apply if the licensed manufacturer has been compensated for the loss of the excisable goods and the compensation includes the excise duty payable on the goods, as a consequence of any of the following—

• (a) an insurance policy, indemnity, or other agreement; 
• (b) a settlement; or 
• (c) a judicial decision.