VAT relief to Investor under EPZ, SEZ and Mining, Oil & Gas Companies
An investor licensed under export processing or special economic zone Acts is entitled to VAT special relief. Mining, oil & gas companies are entitled to VAT relief provided that the Company has a binding agreement with the Government which provides for VAT relief. In order to enjoy such both Investors and entitled mining companies are obliged to fill form: ITX263.02. E. The form can be obtained from any TRA nearest office or you may download through TRA website.
Deferment of Capital goods
Deferment means a postponement of payment of the value added tax in respect of capital goods.
Deferment on imported capital goods is not automatic as is upon application by the applicant; the application is subject to scrutiny and approval by the Commissioner. The VAT embodied on each unit of the imported item/good must have VAT element exceeding 20,000,000.
The deferment is due within ten years. Goods imported whose VAT is less than 20,000,000/- shall be treated as normal and shall follow normal rules of calculation of taxes by Customs laws and procedures.
When the trader imports capital goods, the differed tax shall be treated as output tax and input tax of the importer at the time of importation and shall be accounted on the same tax return. Where the period of deferment elapses the differed tax shall not be paid. The deferment granted must be for producing taxable goods and not exempt supplies