Chapter I: Preliminary Provision

Article 1: 

In application of the provisions of this Law, the following shall mean :

The Minister :The Minister of Finance

The Commissioner :The Commissioner of the Sales Tax Department.

The Department :The Sales Tax Department.

The Tax :The General Sales Tax

Taxable person :The natural or juridical person required to collect and pay the Tax to the Department whether said person is a manufacturer, a trader or a supplier of a taxable service(s) whose sales reach the registration threshold specified herein. Also each and every importer of a taxable commodity or service for commercial purposes regardless of his/her annual turnover.

Commodity :Each and every manufactured product(s) whether locally manufactured or imported.In defining commodity, the remarks and provisions stated in the sections and chapters of Customs Tariff shall be taken as guide.

Service :Each service stated in Table No(2) attached hereto

Sale :The transfer of ownership of commodity or the supply of service from the seller, even if he/she is an importer, to the purchaser for the purposes of this Law. The following shall, in application of the provisions of this Law, be deemed sale whichever occurs first :
  • Issuance of invoice.
  • Delivery of commodity or supply of service
  • Payment of consideration for the commodity or service whether fully or partially, or payment of a downpayment or as settlement of accounts or on credit or any other form of payment in accordance with any of the terms and conditions of payment.
Manufacture :Conversion of material, whether organic or inorganic, manually, mechanically or by any other means, into a new product, or changing the size or shape or components or nature or kind thereof.
Assembling parts of equipment, packing and repacking, preservation in boxes, parcels, bottles or any other containers shall be deemed manufacture. However, packing of unprocessed agricultural products as they are and / or packing by retailers when directly selling to consumer and installing of machinery and equipment for construction purposes , shall not be deemed manufacture .

Manufacturer :All and every natural or juridical person, regularly or accidentally and whether as principal or agent who carries on any manufacturing process.

Service Supplier :All and every natural or juridical person who supplies a taxable service.

Importer :All and every natural or juridical person who imports taxable goods or services for commercial purposes .

Registrant :The taxable person registered at the Sales Tax Department under the provisions of this Law.

Tax invoice :The invoice prepared in accordance with the form prescribed in a decree by the Commissioner.

Month :The calendar month.

The Fiscal Year :Twelve months starting and expiring with the fiscal year of the taxable person.

The wholesaler :All and every natural or juridical person who sells taxable commodities to others who sell or manufacture such purchases.

The Retailer :All and every natural or juridical person who sells his / her taxable purchases as they are to the final consumer.

The Additional Tax :A sales tax of 0.5 % of the unpaid tax per week or part thereof allover the period succeeding last due date of G.S.T payment .

Input Tax r :The Tax previously charged on the intermediary goods used in manufacturing taxable goods.

Exempted goods :The goods included in the exemption lists

Phases of Tax application

  • Phase 1 : In which a manufacturer and / or an importer and / or a service supplier are required to collect and pay the tax to the Department .
  • Phase 2 : In which the manufacturer and / or the importer and / or the service supplier as well as the wholesaler are required to collect and pay the Tax to the Department.
  • Phase 3 : In which the manufacturer and /or the importer and /or the service supplier and / or the wholesaler as well as the retailer are required to collect and pay the Tax to the Department.

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