Transcript REVAMPING MRA’s IDENTITY

05 June 2015
Amendments brought to VAT
Act & MRA Act by the
Finance Act 2015
Presented By
Mario Hannelas
Large Taxpayer Department
Electronic Fiscal
Devices
 New Section 19 A inserted to provide for
implementation of EFD
 Project expected to be implemented in the course of
FY 2015-2016
 VAT Registered persons in specified trade activity
will be requested to install EFD to record all
supplies made
 The EFD shall be of such type, description and
usage as may be prescribed
VAT INVOICES
Amendment to Section 20 provides for VAT invoice to
state:
 Whether or not supply is subject to VAT
 Where the supply is subject to VAT:
 The value of the supply
 The amount of VAT chargeable and
 The rate applied
 Effective as from 01 July 2015
Time Limit to Claim
Credit for input tax against output tax
 Amendment to Section 21 (6) provides for an
extension of the delay for claiming input tax by 12
months i.e from 24 months to 36 months
 Effective as from 14 May 2015
Time limit for
repayment
 Amendment to Section 24 provides for statutory
delay of 45 days for effecting repayment to run as
from the date of submission of documentary
evidence, where such request is made
 Effective as from 14 May 2015
Amendment to
Penalty Provisions
Section 26 (non-submission of return by due date)
and Section 27 (late payment of tax)
 Distinction between small enterprise and other
VAT registered persons
 Small enterprise defined as a person whose annual
turnover does not exceed Rs 10M
 Maximum penalty to be charged to a small
enterprise is for non submission of return by due
date Rs 5000 instead of Rs 20,000 and for late
payment of tax 2% of unpaid tax instead of 5%
 Effective as from 14 May 2015
DEDUCTION FROM
VAT BY PSA
Amendment to introduce New Part VI A to
provide for Public Sector Agency (PSA) to deduct
an amount from VAT
 PSA defined as including a Ministry, Government
department, a local authority, a statutory body
and the Rodrigues Regional Assembly
 PSA must deduct/retain and remit to MRA 30%
(for construction contracts)/50%
(for other
contracts e.g cleaning, security) of VAT charged on
invoice received on contracts exceeding Rs
300,000
DEDUCTION FROM VAT BY
PSA (CONTD)
Amount retained/deducted by PSA
Considered to have been paid by the VAT
registered person as VAT in the month of
deduction
May be set off against VAT payable for the taxable
period in which the VAT is deducted
Where VAT deducted exceeds VAT payable, VAT
refund to be effected
DEDUCTION FROM VAT
PSA (CONTD)
 Remittance of amount deducted
 PSA to remit the amount so deducted within 20 days from
the end of month in which deduction effected
 Late payment penalty of 5% applies
in case of late
 Interest rate of a 0.5% applies
remittance
 Effective date to be fixed by Proclamation
Amendment to introduce
new Part VI B
VAT relating to small Business
 Small business may operate the VAT Annual Accounting
System (VAAS)
 Appropriate for small businesses not mainly engaged in zerorated supplies
 Effective as from 01 July 2015
Amendments for
VDIA Provisions
 Section 73 amended by insertion of new provision
10A
 Applicable where: Taxpayer has made a VDIA declaration and made
agreement for payment of tax declared on VDIA
 Director-General is debarred in respect of the VDIA period
from:
 Asking information, documents, return, or
 Making an assessment or claim
Amendments for
VDIA Provisions
 Where taxpayer has been assessed and
assessment or claim is under objection or before
ARC, assessment or claim is deemed to have
lapsed.
 Provisions do not apply where
 Director-General applies expart to Independent Tax Panel
 Proves to the satisfaction of Panel that there is prima
facie evidence of fraud; and
 Obtains authorisation of I.T.P to proceed
 Effective date to be fixed by Proclamation
Extension of zero-rating
 Fifth Schedule amended to include:
 Chilled deep sea water used for provision of air
conditioning services
 Effective from – 14 May 2015
 Threshold for compulsory Registration
Annual Turnover of Taxable supplies
Threshold increased from 4M to 6M
Effective from 01 June 2015
Amendment to Sevnth
Schedule
Remove from Part II of following items
Mineral waters, aerated waters and soft drinks
Alcoholic drinks
Effective from 01 January 2014 (Provision was
in fact suspended administratively)
Amendment to Ninth Schedule
 Clarification in respect of item 13
Exemption available only to private hospital under the
Private Health Institution Act
Not available to Nursing Homes & Residential Care
Homes
 Addition of New Items:
15 – Person engaged in bio-farming project exempted
on materials for exclusive use or in furtherance of boifarming
16 – Company engaged in exploration of petroleum
products exempted on plant machinery & equipment
for exclusive in the exploration and production of
petroleum products
Amendment to Tenth
Schedule
 Removal from compulsory registration of “Dealers
registered with the Assay Office under the
Jewellery Act”
 Addition of “Agent in the importation of second
hand cars and other motor vehicles”
 Effectively Date 01 June 2015
 List of agents to be obtained from Customs? Or
Ministry of Commerce? Communique to be issued
Amendment to Twelfth
Schedule
 Refund of VAT on residential buildings/apartment
 Construction period extended to 30 June 2018
Amendments brought to
MRA Act
Assessments or claims
All assessments or claims issued by MRA to specify:
 The amount of deduction disallowed, the reasons thereof;
 The basis for the computation of the amount and its
justification
 The reasons for making the assessments or claim
Amendments brought to
MRA Act
Discretionary Powers
MRA to issue statement of Practice specifying the
circumstances in which the discretionary powers are
exercised.
Independent Tax Panel
New Part IV A inserted to provide for the setting up of an
Independent Tax Panel