1. Amendments brought to VAT Act & MRA Act by the Finance Act 2015
05 June 2015
Presented By
Mario Hannelas
Large Taxpayer Department

2. Electronic Fiscal Devices
New Section 19 A inserted to provide for implementation of EFD
Project expected to be implemented in the course of FY
VAT Registered persons in specified trade activity will be requested to install EFD to record all supplies made
The EFD shall be of such type, description and usage as may be prescribed

3. VAT INVOICES
Amendment to Section 20 provides for VAT invoice to state:
Whether or not supply is subject to VAT
Where the supply is subject to VAT:
The value of the supply
The amount of VAT chargeable and
The rate applied
Effective as from 01 July 2015

4. Credit for input tax against output tax
Time Limit to Claim
Credit for input tax against output tax
Amendment to Section 21 (6) provides for an extension of the delay for claiming input tax by 12 months i.e from 24 months to 36 months
Effective as from 14 May 2015

5. Time limit for repayment
Amendment to Section 24 provides for statutory delay of 45 days for effecting repayment to run as from the date of submission of documentary evidence, where such request is made
Effective as from 14 May 2015

6. Amendment to Penalty Provisions
Section 26 (non-submission of return by due date) and Section 27 (late payment of tax)
Distinction between small enterprise and other VAT registered persons
Small enterprise defined as a person whose annual turnover does not exceed Rs 10M
Maximum penalty to be charged to a small enterprise is for non submission of return by due date Rs 5000 instead of Rs 20,000 and for late payment of tax 2% of unpaid tax instead of 5%
Effective as from 14 May 2015

7. DEDUCTION FROM VAT BY PSA
Amendment to introduce New Part VI A to provide for Public Sector Agency (PSA) to deduct an amount from VAT
PSA defined as including a Ministry, Government department, a local authority, a statutory body and the Rodrigues Regional Assembly
PSA must deduct/retain and remit to MRA 30% (for construction contracts)/50% (for other contracts e.g cleaning, security) of VAT charged on invoice received on contracts exceeding Rs 300,000

8. DEDUCTION FROM VAT BY PSA (CONTD)
Amount retained/deducted by PSA
Considered to have been paid by the VAT registered person as VAT in the month of deduction
May be set off against VAT payable for the taxable period in which the VAT is deducted
Where VAT deducted exceeds VAT payable, VAT refund to be effected

9. DEDUCTION FROM VAT PSA (CONTD)
Remittance of amount deducted
PSA to remit the amount so deducted within 20 days from the end of month in which deduction effected
Late payment penalty of 5% applies in case of late
Interest rate of a 0.5% applies remittance
Effective date to be fixed by Proclamation

10. Amendment to introduce new Part VI B
VAT relating to small Business
Small business may operate the VAT Annual Accounting System (VAAS)
Appropriate for small businesses not mainly engaged in zero-rated supplies
Effective as from 01 July 2015

11. Amendments for VDIA Provisions
Section 73 amended by insertion of new provision 10A
Applicable where:-
Taxpayer has made a VDIA declaration and made agreement for payment of tax declared on VDIA
Director-General is debarred in respect of the VDIA period from:
Asking information, documents, return, or
Making an assessment or claim

12. Amendments for VDIA Provisions
Where taxpayer has been assessed and assessment or claim is under objection or before ARC, assessment or claim is deemed to have lapsed.
Provisions do not apply where
Director-General applies expart to Independent Tax Panel
Proves to the satisfaction of Panel that there is prima facie evidence of fraud; and
Obtains authorisation of I.T.P to proceed
Effective date to be fixed by Proclamation

13. Extension of zero-rating
Fifth Schedule amended to include:
Chilled deep sea water used for provision of air conditioning services
Effective from – 14 May 2015

14. Threshold for compulsory Registration
Annual Turnover of Taxable supplies
Threshold increased from 4M to 6M
Effective from 01 June 2015

15. Amendment to Sevnth Schedule
Remove from Part II of following items
Mineral waters, aerated waters and soft drinks
Alcoholic drinks
Effective from 01 January 2014 (Provision was in fact suspended administratively)

16. Amendment to Ninth Schedule
Clarification in respect of item 13
Exemption available only to private hospital under the Private Health Institution Act
Not available to Nursing Homes & Residential Care Homes
Addition of New Items:
15 – Person engaged in bio-farming project exempted on materials for exclusive use or in furtherance of boi-farming
16 – Company engaged in exploration of petroleum products exempted on plant machinery & equipment for exclusive in the exploration and production of petroleum products

17. Amendment to Tenth Schedule
Removal from compulsory registration of “Dealers registered with the Assay Office under the Jewellery Act”
Addition of “Agent in the importation of second hand cars and other motor vehicles”
Effectively Date 01 June 2015
List of agents to be obtained from Customs? Or Ministry of Commerce? Communique to be issued

18. Amendment to Twelfth Schedule
Refund of VAT on residential buildings/apartment
Construction period extended to 30 June 2018

19. Amendments brought to MRA Act
Assessments or claims
All assessments or claims issued by MRA to specify:
The amount of deduction disallowed, the reasons thereof;
The basis for the computation of the amount and its justification
The reasons for making the assessments or claim

20. Amendments brought to MRA Act
Discretionary Powers
MRA to issue statement of Practice specifying the circumstances in which the discretionary powers are exercised.
Independent Tax Panel
New Part IV A inserted to provide for the setting up of an Independent Tax Panel