Measure

A registered person must pay tax based on their output tax minus eligible input tax deductions, including certain imports and insurance payments. Input tax deductions require a bill of entry and can only be claimed within specific time limits.

18. (1) The tax payable by a registered person for a tax period shall be the total amount of output tax payable by the registered person in respect of taxable supplies made by the registered person during the tax period less -

(a) subject to this section and section 19, the total amount of input tax -

(ii) paid in respect of any import of goods by the registered person during the tax period, or during the preceding tax periods (and has not been claimed under this subparagraph in those periods), in the course or furtherance of a taxable activity carried on by the registered person: Provided that the import of goods by the registered person during the tax period or during the preceding tax periods is connected with the making of taxable supplies: Provided further that no deduction in relation to that importation shall be made in respect of any tax period which ends more than three years after the end of the tax period during which the registered person for the first time becomes entitled to such deduction;

(d) an amount equal to the tax fraction of any amount paid during the tax period by the registered person to indemnify another person under any short-term insurance contract, provided -

(i) the supply of the short-term insurance contract is a taxable supply; and

(ii) the payment is not in respect of the supply of goods or services to the registered person or the importation of goods or services by the registered person;

(2) Notwithstanding anything in this Act, no deduction of input tax shall be made in respect of a supply or an import, unless -

(b) a bill of entry as defined in section 1(1) of the Customs and Excise Act, in relation to that import, has been delivered in accordance with the said Act and is held by the registered person making the deduction at the time any return in respect of that import is furnished.

(3) A deduction shall be allowed to a registered person in the first tax period in which such person is registered for input tax paid or payable by such person in respect of -

(b) any imports of goods (other than capital goods) made by such person, before becoming registered, to the extent that the goods are for use or resupply in a taxable activity carried on by such person after registration, provided -

(i) the supply or import occurred not more than four months before the date of registration; and

(ii) the goods are on hand at the date of registration.

(5) A person registered under section 15(1)(c) may claim input tax -

(b) paid in respect of any import of goods by the registered person during the tax period or during the preceding tax periods which are directly connected with the furtherance of, or in the course of carrying on, its taxable activity, which taxable activity is directly connected to the intended making of future taxable supplies and has not been claimed under this paragraph in those periods: Provided that no deduction in relation to that importation shall be made in respect of any tax period which ends more than three years after the end of the tax period during which the registered person for the first time becomes entitled to such deduction.