The BIR said that if a taxpayer has no other sales transactions subject to VAT against which its
input taxes may be used in payment, then, it follows, that it is constituted as the final person against which the costs of the tax passed on shall legally stop and rest.
So, whether you use an SME loan to purchase machinery or vehicles, remember to claim the
input tax credit and thereby lower your tax payments.
He also highlighted that Singapore pays interest on
input tax refunds that are not made within 30 days whereas Malaysia did not.
He was of the view that by eliminating
input tax at the import stage, the FBR would be able to reduce monthly refund claims by Rs160 million, which would ultimately give a sigh of relief to the farmers.
By eliminating the aforesaid
input tax at import stage, FBR will be reducing monthly refund claims to the tune of Rs160m which will ultimately give a sigh of relief to the industry and poor farmers,' he added.
The supplier must send a VAT-compliant tax sales credit note to the customer, obliging the customer to repay the
input tax recovered.
Analysis of data of some registered businesses reveals that they have applied for
input tax in relation to purchases that were not related to their business activity.
Before the February GST Council meeting, the GST on real estate was 12% with
input tax credit and for affordable housing it was 8% with
input tax credit.
Input tax - tax paid by a taxable person on goods or services purchased.
A key principle of a VAT system is the ability for a business to offset the VAT incurred on purchases (
input tax) against the VAT charged on sales (output tax).
While for small service providers, the Council may announce a flat 5 percent GST though these businesses may not get the benefits under
Input Tax Credit.
