- 10 Marks
Question
According to section (38) of the Value Added Tax Act, 2013 (Act 870), the Minister may by legislative instrument make regulations to grant relief from tax on taxable imports of goods or taxable supplies of goods acquired in the country to the persons specified in the Third Schedule.
Required:
State FOUR (4) conditions that must be satisfied by VAT-registered manufacturing companies before they are granted upfront relief of VAT and levies on imported raw materials. (10 marks)
Answer
The conditions that VAT-registered manufacturing companies must meet to be granted upfront VAT relief on imported raw materials include:
- The manufacturer must be a member in good standing of the Association of Ghana Industries (AGI).
- The manufacturer must have submitted all previous tax returns and paid all outstanding taxes, penalties, and interest.
- The Commissioner-General must be satisfied with the manufacturer’s compliance and must list the manufacturer in a register published with a validity of 12 months.
- The raw materials imported must be applied solely and exclusively for the manufacturing operations of the company.
- The manufacturer must maintain an input-output ratio of at least 20%, except when imports exceed GH¢100,000 in a year.
- The manufacturer must belong to one of the following categories: Textiles, Food & Drug, Toiletries, Energy, Leather, Rubber & Plastics, Building Materials, Chemicals, Wood Processing, or Electrical & Electronics.
- Tags: Manufacturing, Raw Materials, Tax law, VAT Act 2013, VAT Relief
- Level: Level 2
- Topic: Value-Added Tax (VAT), Customs, and Excise Duties
- Series: DEC 2023
- Uploader: Kwame Aikins