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Policy 43 – VAT on Rice and Rice Products

Policy 43 – VAT on Rice and Rice Products

November 22, 2022

The Guyana Revenue Authority continues to provide assistance to the general public on various issues regarding the application of Value Added Tax (VAT). As a result, this policy addresses issues concerning VAT on rice and rice products.

Schedule I Paragraph 11 (g) of the VAT Act Chapter 81:05, zero rates a supply of paddy. Additionally, Paragraph 13 (b) zero rates a supply of raw brown rice, raw white and parboiled rice but not including all other rice such as basmati rice, converted rice, exotic species of rice, rice packaged with flavourings, or rice processed to allow for quick cooking.

Therefore, registered businesses who sell paddy, raw brown, raw white rice or parboiled rice will charge VAT at the rate of zero percent. This means that there will be no dollar value attached to the cost of these products. Similarly, consumers and intermediary traders or manufacturers will not pay VAT on these products when purchases are made.

However, when raw brown rice, raw white and parboiled rice is cooked and supplied to customers, VAT at the standard rate of fourteen percent (14%) will apply.

In addition, Schedule I, Paragraph 11 (o) zero rates a supply of poultry feed, cattle feed, pig feed, other animal feed and ingredients and animal feed as determined by the Commissioner-General, but not including pet feed.

Accordingly, consumers who purchase by-products of rice, such as rice bran, rice husk etc. to be used as completed feed for poultry, cattle, pigs and other animals will not pay VAT on these products also.

Since zero-rating is a positive tax treatment, registered businesses which sell zero-rated supplies are entitled to input tax credit paid on purchases related to the zero-rated supply.

Consequently, registered businesses may file for a full refund of input tax credits on a monthly basis if the zero-rated items account for at least fifty percent (50%) of the amount of the taxable supplies.

Furthermore, registered businesses which are involved in the sale of mixed supplies, that is, exempt supplies and standard rated and/or zero-rated supplies may file a claim every month to the Guyana Revenue Authority for a refund of the excess credits attributable to the zero-rated supplies only.

Therefore, if fifty percent (50%) or more of the taxable supplies of a registered person are taxed at zero percent (0%), that person can claim a refund of the credits attributable to the zero-rated supplies each month.

On the other hand, claims for refund relating to the standard rated supplies must be carried forward for six consecutive months before an application is filed.

Contact Us:
Tax Advisory Services Section
Communications & Tax Advisory Services Division
Guyana Revenue Authority
200 -201 Camp Street
Tel: 227-6060 | 227-8222 Ext: 8000
Email: taxadvisory@gra.gov.gy
Website: www.gra.gov.gy