Will all the businesses need to register with the government for VAT?
No, not all the business will be required to register with the government for VAT. Only the businesses, which have a certain minimum annual turnover will be required to get registered for VAT. So, many small businesses will not need to get registered for VAT. This step has been taken to prevent small business holders from extensive reporting and documentation that VAT requires. The business which provides goods and services, which are not subject to VAT will also not have to register with the government. Notably, the government has not decided the minimum annual turnover, which will help in identifying businesses that do not need to register for VAT.
What are the VAT-related responsibilities of businesses?
All the business holders across the country will need to keep the record of their financial transactions accurate and up to date. The businesses, which meet the minimum annual turnover fixed by the government, will have to register for VAT.
VAT-registered businesses generally have to follow the given instructions:
- They must charge VAT on all the taxable goods and services they provide.
- They can reclaim any VAT they’ve paid on goods and services.
- They have to maintain proper business records so that government can check that things are going in right direction.
- VAT registered businesses must report the amount of VAT they’ve charged and the amount of VAT they’ve paid to the government on a regular basis. If the charged VAT is more than the VAT paid to the government then the business holders have to pay the difference to the government.
What does a business need to do to prepare for VAT?
The business organisations will have enough time to get prepared before the implementation of VAT. Business holders should the preparation as soon as possible so that they will be ready at the right time. Businesses will also need to make some changes in their basic operations, their financial management and book-keeping, their technology, and perhaps even their human resource mix (e.g., accountants and tax advisors). Businesses have to understand the implications of VAT and should make every possible effort to work honestly with the government after the implementation of VAT.
When are the businesses supposed to start registering for VAT?
The businesses that fulfill the requirement criteria will be able to register for VAT before three months of its launching via eServices.
How often are registered businesses required to file VAT returns?
Registered users are likely to submit VAT returns on a regular basis. The default time period for filing VAT returns is expected to be three months for a majority of businesses. Registered businesses will be capable of filling their returns using online eServices.
What kind of records are businesses required to maintain, and for how long?
Businesses will have to maintain genuine records so that government authorities will be able to identify the details of the business activities and review transactions. The time period and more details regarding the documents will be announced in due course.