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VAT Policy#42 : VAT & Sugarcane and Raw Brown Sugar (Revised March 15, 2022)

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VAT Policy#42 : VAT & Sugarcane and Raw Brown Sugar (Revised March 15, 2022)

May 9, 2022

This policy seeks to address the various issues regarding the application of Value Added Tax specifically on Sugarcane and Raw Brown Sugar.

Schedule I, paragraph 13 (c) of the VAT Act zero rates a supply of sugarcane and raw brown sugar. Therefore, consumers will not pay VAT at the standard of fourteen percent (14%) when making purchases since businesses are required to apply VAT at the rate of 0% on raw brown sugar.

Notwithstanding the above, other sugars such as granulated sugar, processed sugars such as white sugar, powdered sugar, icing sugar or confectioners sugar, castor/caster sugar, maple sugar and sugar extracts including saccharine, sucralose, aspartame, cyclamate and Acesulfame-K are not zero rated and will attract VAT at the standard rate of fourteen percent (14%), given that these products have been added to, altered or otherwise enhanced during the production process to add value to the final product.

Therefore, registered businesses must charge VAT at the rate of fourteen percent (14%) on any sugar product that has been enhanced through its production process.

In accordance with Section 35 (5) of the VAT Act, Chapter 81:05 which states that,

“Where at least fifty percent (50%) of the amount of the taxable supplies of a taxable person for the taxable period is taxed at a zero rate, and the person reports an excess described in subsection (1)(a) for a taxable period, the person may file with the Commissioner a claim for refund for the excess credits attributable to the zero-rated supplies in the form and with the documentation specified in regulations.”

Where a VAT registered taxpayer’s zero rated supplies is fifty percent (50%) or more, then that person can claim a refund of the input credits attributable to the zero rated supplies each month.

In view of the above legislation, registered businesses trading in zero rated supplies in excess of 50%, can claim VAT refunds every month to the Guyana Revenue Authority.

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 | gravat@gra.gov.gy
Website: www.gra.gov.gy