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Khurshid Sattaur
Commissioner General
Mission Statement
Our mission is to promote compliance with Guyana’s Tax, Trade and Border Laws and Regulations through education, quality service and responsible enforcement, thereby contributing to the economic and social well being of the people of Guyana. |
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Nadia De Abreu
Director - Corporate Communications Unit
Tel: (592) 227-3680
ext 222 |
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VAT and Exempt Supplies
Following the policy on zero rated supplies the Guyana Revenue Authority finds it necessary to clarify issues pertaining to exempt supplies with the aim of providing a better understanding of the term.
A number of goods and services are exempt under the Value Added Tax (VAT) Act and such items should be distinguished from zero-rated supplies.
Supplies which are exempt do not fall within the scope of the VAT and as such, VAT cannot be charged.
Section 18 of the VAT Act 2005 states that, a supply of goods or services is an exempt supply, if it is specified in Schedule II, paragraph 2 of the said Act.
Therefore, businesses which sell exempt supplies would not be required to be registered for VAT. Additionally, a registered person who purchases goods or services which are exempt cannot claim input tax credit for any VAT paid (input tax) on those purchases, even if acquired for use in a taxable activity.
At times, a supply of goods or services can consist of both exempt and taxable supplies. Thus, Section 4 of the VAT Act provides that, wherever practical, each type of supply is considered a separate transaction and therefore must be classified as either taxable or exempt.
In addition, if a supply of goods or services should happen to be specified in both Schedule I (zero-rated supplies) and Schedule II (exempt supplies), the zero-rating takes priority under the rule of section 18.
In conclusion, one can establish the difference between exempt supplies and zero rated supplies by taking into account that exempt supplies do not attract VAT whilst zero rated supplies are taxable, but at a rate of zero percent (0%). Moreover, businesses making exempt are not required to be registered for VAT whilst businesses making zero rated supplies can register for VAT and claim input tax credits for VAT paid on purchases related to the supply providing certain conditions are satisfied under the VAT Act.
Persons who require the list of exempt items or still have queries with respect to VAT are encouraged to contact the Department on Telephone No. 227-7929, Extension (200) and (201); or write to the Commissioner, VAT and Excise Tax Department, 210’E’ Albert and Charlotte Streets, Bourda for clarifications.
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