- 20 Marks
Question
a). Determine when the following items become taxable supplies under Act 592.
- Imported services
- Supplies made by a non-resident person
- Deposits given in respect of a supply
- Goods supplied on sale or return.
b). The need for Customs, Excise, and Preventive Service (CEPS) to examine goods imported has often been debated since the nature, description, quantity and quality of the goods are in most cases declared in many ways. This practice has its advantages and disadvantages.
Required:
Discuss any four major reasons to support the need for CEPS personnel to examine goods and their relevant documents before export or import.
Answer
a).
- Supplies made by a non resident person para 12 LI 1646:
A transaction involving either goods or services supplied in Ghana by a nonresident person shall be considered to be made and taxable in Ghana if
a. The transaction is made in the course of a business carried on in Ghana and
b. At the time of the transaction, the person is registered under the Act. (4 Marks) - The recipient of service supplied by a non-resident person therefore has to charge himself the VAT and pay the VAT charged to the GRA. (2 Marks)
- Deposits given in respect of a supply
a. Deposits whether refundable or not, given in respect of a supply, shall not be regarded as a supply of goods or services unless the supplier applies the deposit as payment or part-payment for the supply. (2 Marks) - Where goods are supplied on sale or return, the tax point shall be the earliest of
a. The date when the purchaser chooses to keep the goods; or
b. The issue of a tax invoice by the seller, etc
c. The receipt of payment by the seller, other than a deposit, or
d. The expiry of the period within which the customer may return the goods, or
e. Twelve months after the date of dispatch by the seller.
b).CEPS examine goods for many reasons including
- Revenue reasons
Goods are properly examined to ensure that they have been
a. Properly described as such
b. The duty assessed is right and have as well been paid
c. The quantity as declared is correct
d. Rate of duty applied is right
e. The value as declared is right
f. Exemptions claims are justified
g. Country of origin as declared is right.
(4 Marks) - Non-Revenue reasons
Non-revenue reasons are to ensure that the goods imported or exported comply with laid down regulations and that prohibited, expired or dangerous goods not imported into the country.
(2 Marks) - Anti-Terrorist or smuggling reasons
By policing and inspecting the goods, Customs officers ensure that the goods in question respond to their documentation are permitted goods, are not being smuggled in or will not be used to cause mayhem.
(1 Marks) - To audit documentation process
It must be emphasized that the purpose of the examination could be to audit the process for improvement, review or verification.
- Tags: Anti-Smuggling, CEPS, Customs Examination, Non-Revenue Reasons, Revenue Reasons
- Level: Level 3
- Topic: Strategic Indirect Tax Management
- Series: AUG 2012
- Uploader: Samuel Duah