Commission clears GST report

The National Business

THE Internal Revenue Commission (IRC) says suppliers to resource companies have been charging goods and services tax (GST) to them since Jan 1.
The companies will claim GST input credits in their monthly returns.
Acting IRC commissioner-general Dr Alois Daton clarified some misreporting in media recently, in relation to GST claimed by educational institutions and resource company suppliers.
“In other words, ‘zero rating’, which previously applied to resource company suppliers, has been removed from the GST Act in the 2019 Budget due to abuse of its application,” he said.
According to a statement from the IRC, provisions in the GST Act which allowed educational institutions to claim GST credits, was repealed in the 2018 Budget effective from Jan 1, 2018.
This means that although educational institutions are exempt from GST, they cannot charge or claim GST input credits.

  • A supplier contracted to supply educational materials to a school/educational institution can claim a GST input credit and must charge GST but the school receiving the goods cannot claim input credit because it is exempt from GST;
  • a school or educational institution cannot charge GST to a child or parent on top of the cost of tuition fees/project fees; and,
  • Retail shops or outlets that sell educational (school) materials and uniforms are required to charge GST. The Internal Revenue Commission said any educational institution that provided an educational service was exempt from GST and could not charge GST or claim GST input credits.

“This tax relief, previously enjoyed by educational institutions, was abused through fraudulent claims by individuals and therefor has been stopped,” it said.