Transcript Document

WHAT IS GST?
1. Is a Broad-Based, Multi-Stage Tax on Value Added
Broad–based: charged on a wide range of goods
and services
Multi-stage: charged at every level of the
economic chain
Value added: is a tax on the mark up on goods
and services supplied by one business to another
or to the final consumer
WHAT IS GST (cont)
• A transaction tax on supplies
Charged on each and every transaction involving the
supply of goods or services, including business to
business and business to consumer transactions
3. A consumption tax
Passed on to consumers in price of each consumer
transaction
MAIN FEATURES OF THE GST
•RATES - STANDARD RATE IS 10%
- ZERO RATE (0%)
•THRESHOLD $75,000.00 PER ANNUM
•PRICES CHARGED TO BE GST INCLUSIVE
•THERE ARE A NUMBER OF ITEMS THAT ARE
EXEMPT AND ZERO RATED
TAXABLE SUPPLIES
•THESE ARE THE GOODS AND SERVICES THAT ARE
SUBJECT TO THE GST
•ITEMS THAT ARE ZERO-RATED ARE INCLUDED
•EXEMPT ITEMS ARE NOT INCLUDED
•LEGISLATION PROVIDES RULES ON TIME OF
SUPPLY, CONSIDERATION FOR SUPPLY ETC.
•PERSON MAKING SUPPLY OR IMPORT IS TO
ACCOUNT FOR TAX PAYABLE ON TAXABLE SUPPLY
ZERO-RATED SUPPLIES
• THESE ARE THE GOODS AND SERVICES THAT
ARE SUBJECT TO THE GST, BUT AT THE RATE OF
ZERO PER CENT
• REGISTERED PERSONS CAN CLAIM A CREDIT
FOR TAX PAID/PAYABLE ON INPUTS
• EXAMPLES OF ZERO-RATED SUPPLIES ARE:GOODS AND SERVICES FOR EXPORT
BASIC FOODS:- RICE, SUGAR, MILK AND FLOUR
EXEMPT SUPPLIES
• THESE ARE THE GOODS AND SERVICES THAT
ARE NOT DIRECTLY SUBJECT TO THE GST
• NO GST WILL BE CHARGED ON SALES MADE OF
THESE SUPPLIES
• NO CLAIM OF CREDITS ON INPUTS IS ALLOWED
• EXAMPLES OF EXEMPT SUPPLIES ARE:FINANCIAL SERVICES (EG. BANKING,
INSURANCE)
RESIDENTIAL RENTS
WATER SUPPLIED – BELIZE WATER SERVICES
EDUCATION
MECHANICS OF GST
•GST IS NOT A TAX ON BUSINESSES- registered
businesses can claim back GST on their inputs.
•INPUT TAX – IS TAX PAID ON BUSINESS
PURCHASES; input tax on capital purchases is
deductible at the time of acquisition.
•OUTPUT TAX – IS CHARGED BY REGISTERED
PERSONS ON SALES TO CONSUMERS
GST APPLIED TO PRICE OF A PRODUCT SOLD BY A REGISTERED TAXPAYER
GST RATE = 10%
CIF VALUE
2000.00
IMPORT DUTY @ 20% OF CIF
400.00
2400.00
ENVIRONMENTAL TAX @ 2% OF CIF
40.00
PURCHASE PRICE
INPUT GST (10% OF PURCHASE PRICE)
ADD MARK-UP OF 35% OF PURCHASE PRICE
SELLING PRICE
OUTPUT GST (10% OF 3294.00)
FINAL SELLING PRICE
2440.00
244.00
854.00
3294.00
329.40
3623.40
REGISTRATION
•TAXPAYERS ARE REQUIRED TO BE REGISTERED TO
CHARGE THE TAX
•THRESHOLD IS $75,000 ANNUAL TAXABLE SUPPLIES
•TAXPAYERS ARE TO APPLY FOR REGISTRATION
•CERTIFICATE WILL BE ISSUED AND IS TO BE
PROMINENTLY DISPLAYED AT PLACE OF BUSINESS
ACCOUNTING AND RECORDS
• PROPER RECORDS IS A STRICT REQUIREMENT OF
THE LEGISLATION
• RECORDS INCLUDE:
SALES INVOICES/SERVICE BILLING INVOICES
PURCHASE AND SALES BOOKS
PURCHASE/IMPORT DOCUMENTATION
PURCHASE INVOICES
CREDIT OR DEBIT NOTES
Sample TAX INVOICE
FROM: ABC Furniture Company
ADDRESS: #2 Mayflower Street
Date:
July 12, 2006
Invoice No:00123
TIN No:735211
TO: XYZ Company
ADDRESS: #3 Eve Street
TIN No:772233
QUANTITY
30
GST 10%
Total:-
DESCRIPTION
Chairs @ $15.00 ea.
AMT. EXCLUDING GST
$450.00
$45.00
$495.00
ANGEL CARPENTRY INDUSTRY-GST ACCOUNT, APRIL 2006
Purchases
Sales
Description
Cost GST GST Description Cost GST GST
Rate
Rate
50 chairs @
$10 ea.
$500 10%
$50
Total Purchases $500
Input Tax
$50
30 chairs
$20ea.
$600 10%
Total Sales
$600
Output Tax
Pays to Government: $10 ($60-$50)
If Input Tax is greater than Output Tax a refund is due
$60
$60
RETURNS, PAYMENTS & ASSESSMENTS
• REGISTERED PERSONS WILL BE REQUIRED TO FILE
MONTHLY GST RETURNS
• DEADLINE 15TH OF MONTH FOLLOWING END OF
TAX PERIOD – WHETHER OR NOT TAX IS PAYABLE
• RETURNS TO BE FILED WITH GST DEPARTMENT
• PAYMENT OF TAX DUE SHOULD ACCOMPANY
RETURN
• TAX DUE IS THE DIFFERENCE BETWEEN OUTPUT
TAX AND INPUT TAX
CREDIT/REFUNDS
• WILL OCCUR IF INPUT TAX PAID EXCEEDS OUTPUT
TAX COLLECTED
• CREDIT WILL BE CARRIED FORWARD AS INPUT TAX
FOR NEXT TAX PERIODS
• IF CREDIT EXISTS FOR MORE THAN 3 TAX PERIODS,
CLAIM MAY BE FILED FOR REFUND OF REMAINING
AMOUNT
• INTEREST WILL BE PAYABLE ON REFUNDS UNPAID
3 MONTHS AFTER CLAIM IS FILED
PENALTIES
• THE LAW MAKES PROVISION FOR PENALTIES .
SOME OF THESE ARE:• FAILURE TO REGISTER
• ISSUANCE OF FALSE INVOICES
• FAILURE TO PAY
• FAILURE TO FILE
• FAILURE TO KEEP PROPER RECORDS
• NON-COMPLIANCE WITH PRICE QUOTATION
REQUIREMENTS
OBJECTIONS AND APPEALS
• PROVISION IS MADE IN THE LAW FOR PERSONS TO
MAKE OBJECTIONS
• OBJECTIONS MUST BE IN WRITING AND STATE
PRECISE GROUNDS
• IF NOT SATISIFIED WITH COMMISSIONER’S
DECISION, PERSONS CAN APPEAL TO THE APPEALS
BOARD
• IF NOT SATISIFIED WITH DECISION OF THE APPEAL
BOARD, PERSONS CAN TAKE THE MATTER TO THE
SUPREME COURT
• THE BURDEN OF PROOF LIES WITH THE PERSON
OBJECTING OR APPEALING
KEY POINTS
• G.S.T. IS A TAX ON CONSUMER SPENDING;
•
INPUT TAX IS PAID AT THE POINT OF IMPORT
(THROUGH CUSTOMS) AND PURCHASE FROM A
REGISTERED TAXPAYER;
• INPUT TAX CAN ONLY BE CLAIMED BY A
REGISTERED TAXPAYER
• THE INPUT GST PAID BY A REGISTERED
TAXPAYER IS NOT TO BE ADDED TO THE PRICE
OF THE ITEM;
• FLOUR, MILK, RICE & SUGAR ARE ZERO-RATED;
• ANY INPUT TAX THAT CANNOT BE CLAIMED
BACK WILL BE PASSED ON TO CONSUMERS
• WATER (EXCEPT BOTTLED WATER) OR
DOMESTIC SEWERAGE SERVICES,
• FINANCIAL SERVICES ARE EXEMPT
GST Unit email: [email protected]
Our Phone number is: 222-5553, Fax # 222-5513
To access a copy of the GST Act: www.gst.gov.bz