The Guyana Revenue Authority continues to sensitise taxpayers, the general public and other stakeholders on matters pertaining to the various legislations it administers in order to promote voluntary compliance. This policy provides the legislations and procedure to access tax exemptions on raw and packaging materials by manufacturers who are registered with the Guyana Revenue Authority.
- IMPORT DUTY ON RAW AND PACKAGING MATERIALS
Registered manufacturers may qualify for exemption from import duty on raw and packaging materials acquired in accordance with the First Schedule Part 111 (B) (1) Item 4 of the Customs Act, Chapter 82:01. Some items would not qualify for such exemptions. The items which would not qualify for duty exemptions are contained in the First Schedule Part 111 (C) of the Customs Act, Chapter 82:01. These items are commonly referred to as ‘the list of ineligible items’. However, a manufacturer may access duty exemption on any of these items for a period of time, only if representation is made by the manufacturer to CARICOM and permission is granted.
- VAT ON RAW MATERIALS
Raw materials would be exempt from Value Added Tax (VAT) if the raw materials acquired by the manufacturer is utilised as follows:
- the raw materials are used to produce goods and at least 50% of all its products are exported by the manufacturer, to the satisfaction of the Commissioner. This is in accordance with Paragraph 4 (a) of Schedule 1 of the VAT Act, Chapter 81:05.
- the raw materials are used to produce exempt goods, to the satisfaction of the Commissioner. This is in accordance with Paragraph 4 (c) of Schedule 1 of the VAT Act, Chapter 81:05.
- unprocessed wheat used in the manufacturing process will be exempt from VAT. This is in accordance with Paragraph 4 (k) of Schedule 11 of the VAT Act, Chapter 81:05.
- the raw materials are used to manufacture animal feed (except pet feed), as determined by the Commissioner.This is in accordance with Paragraph 7 (j) of Schedule 11 of the VAT Act, Chapter 81:05
- VAT ON PACKAGING MATERIALS
Manufacturers do not have to pay VAT on packaging materials they acquire if they utilise the packaging materials:
- to package goods they produce and at least 50% of all their products are exported by them, to the satisfaction of the Commissioner. This is in accordance with Paragraph 4 (b) of Schedule 1 of the VAT Act, Chapter 81:05.
- to package exempt goods, to the satisfaction of the Commissioner. This is in accordance with Paragraph 4 (c) of Schedule 1 of the VAT Act, Chapter 81:05.
- EXCISE TAX ON RAW MATERIALS
Some manufacturers may acquire taxable goods and use such goods as raw materials to manufacture non-taxable goods. The phrase ‘non-taxable goods’ means that the manufactured goods do not attract excise tax. In this regard, the manufacturer would not have to pay excise tax on the raw materials which would be used to manufacture goods which are not subject to excise tax. This exemption of excise tax is contained in TABLE A-14 of the Excise Tax Regulations 2005.
PROCEDURE TO ACCESS TAX EXEMPTIONS
Registered manufacturers can access the exemptions mentioned above by applying in writing to the CommissionerGeneral. Such an application should be accompanied by the supporting documents (invoice, bill of lading, etc). Registered manufacturers who were granted trusted trader status would be granted a tax exemption approval letter which would cover the raw and packaging materials to be utilised in one year. This letter would be valid for one year from the date it was issued. Other manufacturers would be granted tax exemption on their raw and packaging materials per consignment. Letters issued to these manufacturers would be valid for three months from the date it was issued.
Tax Advisory Services Section
Communications & Tax Advisory Services Division
Guyana Revenue Authority
200 -201 Camp Street
Tel: 227-6060 | 227-8222 Ext: 1201-1204