Businesses whose Value Added Tax (VAT) returns claim a refund can uplift the refund application forms from the VAT and Excise Tax building at Albert and Charlotte streets.
On February 21, the first deadline for VAT returns, 1,674 of the 2,100 VAT registrants had filed returns and 550 of these had claimed a refund.
VAT and Excise Commis-sioner (ag.) Hema Khan told the media yesterday at the VAT Department that they are now ready to process refunds. Refunds arise where the Input Tax (VAT paid on purchases or services) exceeds the Output Tax (VAT collected).
Where an entity sells 50% or more zero-rated items (exports are zero rated) these businesses are eligible for a refund on a monthly basis. However, the VAT law gives the Guyana Revenue Authority (GRA) 60 days to pay refunds. The Operations Unit at the VAT department is responsible for refund claims and the Refund Verification and Audit Unit is responsible for the verification and refund process. Khan noted that all refunds will be subject to an audit.
In relation to zero-rated supplies, full credit will not be given in a one-off payment but will be done according to the amount of zero-rated supplies sold or processed during the period. Refund claims over $20,000 will be paid after being subjected to an audit as determined by the GRA, but below this amount a credit will be forwarded to the next tax period or month. After six consecutive months, in the seventh month, businesses that are not engaged in activities where 50% or more of their items are zero-rated or had six consecutive forwards of credit will be eligible for a refund, after applying for same.
For persons who would have overpaid taxes a refund will be given within 30 days or within 60 days.
Meanwhile, the extended deadline ends today for persons to file their VAT returns, without facing the penalties of $1,000 a day for late returns or 10% of the amount due in taxes for that month. The interest of 2% per month or part of a month was not waived for late VAT returns.
Diplomatic missions
Diplomatic and Consular Missions and CARICOM and International Organizations, it was reiterated, are not charged VAT on their imports and on local purchases of office supplies, equipment, vehicles, telephone and electricity bills, in addition to meals at official receptions.
Khan explained that diplomatic missions can uplift the forms to file these refund claims from the Ministry of Foreign Affairs for completion and return to the ministry and the ministry will forward these claims to the VAT office.
For non-residents, certain items are allowed as VAT free purchases and refund forms may be uplifted from the Cheddi Jagan International Airport, Timehri.
On Monday a special desk and booth will be put in place by the GRA to administer these forms and to verify the purchases for which refunds are being claimed.
Khan said that checks may also have to be made with the seller of the item, hence refunds will not be issued at the airport and a cheque will be mailed within 30 days. Cheques will be payable in US, Sterling or Canadian currency. Non-residents who purchase items and paid in excess of $20,000 in VAT and which are exported as accompanied baggage will also be eligible for a refund. The Commissioner noted that non-registrants will be required to produce proof of original tax or sales invoices to the GRA on or before departure for the claim to be processed.
Yesterday the Commis-sioner indicated that less than 10% of the outstanding 20% returns are still outstanding but businesses were filing returns as of yesterday. In addition, enterprises continue to register for VAT as well. Businesses which are eligible to register and do not do so are liable for double the amount of tax they should have collected since the time they should have first registered, plus interest and late filing penalties – or they could face a fine of $25,000 and imprisonment for two years.
Khan in a press statement noted that entities involved in supplying zero-rated items such as schools and health institutions might be entitled to such refunds since they are allowed to claim refunds of credit after a month.
It is to be noted also that the Commissioner may apply the amount of refunds claimed against any outstanding tax, levy, interest, or penalty due from the claimant under VAT, or against any other unpaid taxes collected by the Commissioner, or any unpaid amounts under the repealed Consumption Tax Act. After these deductions, if any, the remainder is payable to the claimant.
Where the Commissioner fails to pay a refund of tax in accordance with the provisions of the VAT Act, the claimant is entitled to an additional amount as interest at a rate of one percent simple interest per month or part thereof.
