st Dec With effect from 1 st ecember 20 2019 Speaker: CA Anurag Chaturvedi, Secretary ICAI Dubai Chapter
Your Eligibility to Register List Products Cabinet Decision No.52 of 2019 on Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise price Documentation & Reporting www.icaidubai.org Disclaimer: **Material Prepared for webcast purposes and training purpose only and is not intended to provide, and should not be relied as Tax advice or any other Page 1 of 24
Determine impact of new cabinet decision on your business What’s the scope of new Cabinet Decision There are various categories of registrants under Excise Tax There are Certain conditions linked with each category of registrant to ascertain their eligibility for registration Page 2 of 24
Excise is extended on the following products, Ca Cabinet t Dec ecision no. o. 52 52 will replace the previous Cabinet Decision No.38 of 2017 on Excise Goods, Excise Tax Rates and Methods of Calculating the Excise Price, ex expands the sco cope of of Exci xcisable Goo oods to o include the foll ollowing: 1. 1. Sweete tened dr drinks; 2. 2. Li Liquids used in el electr tronic smoking dev devices and tools; ; and 3. 3. Electr tronic smoking dev devices and tools Excise Tax will be applicable at the rate of 50 50% and 10 100% of the higher of the price published by the FTA or the designated retail sales price less tax included on sweete tened dr drinks and liquids used in el electronic smoking de devices and tools as wel ell as the dev devices and tools themselves, respectively. Page 3 of 24
The Cabinet Decision further includes the following key points: 1. Sweetened drinks will include any products which with added sugar (as determined under Standard 148 48 of of the e GS GSO) or 2. Other sweeteners (as determined under Standard 995 95 of of th the e GS GSO) 3. Beverages which cont ntain n at t lea east 75% 5% milk or milk substitutes, baby formula, baby food, beverages consumed for special dietary needs wi will not t fa fall under the scope of excise tax. 4. Beverages consumed for medical uses (As determined under Standard 136 366 of of the e GS GSO) wi will not ot fa fall under the scope of excise tax . The Institute of Chartered Accountants of India Page 4 of 24
Excise Tax is the res espon onsib ibil ilit ity of any person engaged in: 1. The import of excise goods into the UAE 2. The production of excise goods where they are released for consumption in the UAE 3. The stockpiling of excise goods in the UAE in certain cases 4. The release of excise goods from a designated zone If you are an importer of excise If you produce any excisable goods goods. Holds exce excess ’ excise good in stock In certain cases for free circulation in the UAE a person releasing excise goods from a designated zone. Page 5 of 24
There is no registration threshold for Excise Tax, therefore any person who is involved in any of the activities listed in law must register and account for Excise Tax. Page 6 of 24
No Threshold. As an importer of excisable goods, you must register on or before the date of law coming into effect. Tourist in excess of excisable goods of AED 3000. Any person who is releasing excisable more than 2 times 12 months. Are you an excise registrant? No threshold. If you are producer of excise goods, you must register on or before the date of law coming into effect. No threshold. Where an importer, producer, a person releasing stock for stockpile fails to pay Excise Tax which have become Chargeable on goods previously kept in DZ. Warehouse keeper will be jointly liable, for due tax. Page 7 of 24
If the person holds stock which exceed either the avera rage month nthly ly st stock level held by the person, based on the • person’s average monthly stock holding level of that excise good or more re than an 2 month nths ’ supply of excise goods (i.e. more than 2- • months average sales volume ), any stock in excess of 2 months’ supply shall be cons nside idered ed ex excess ex excis ise e goods ds. Are you an excise registrant? Business held 130 30 units of a specific Sweetened Drink from December 18 – April 19. 150 50 units of this Sweetened Drink per month From May 19 – September 19 230 30 units In October and November 19. Further business sold 90 0 units of the Sweetened Drink per month for 3 months of the year and 110 10 units per month for 9 months of the year. On 1 December 2019, Business had 230 30 units of the sam ame Sweetened Drink on hand and. Page 8 of 24
Ca Calculation: : Average Sales Ca Calculation: : Average Stock During the period 1 December 2018 – 30 Its average monthly stock holding for the period 1 November 2019, Coffee Shop LLC sells: December 2018 – 30 November 2019 is as follows: 90 units x 3 months = 270 130 units x 5 months = 650 110 units x 9 months = 990 150 units x 5 months = 750 Average monthly sales volume = (270 + 990) / 230 units x 2 months = 460 12 = 105 units Avera rage month nthly st stock leve evel l = Two times ave verag rage e month nthly ly sa sale les s volu lume e = 210 uni nits ts (650 + + 750 + + 460) ) / 12 = 155 uni nits ts Therefore, Excise Tax shall apply on the higher ‘excess’, which in this example is Calculation A, i.e. on 75 units (23 230-155) 5) Page 9 of 24
Register Taxable person and Excisable Goods. The Institute of Chartered Accountants of India Page 10 of 24
Create your account on eservices.tax.gov.ae You shall register all your products on brandsync.com to complete your registration formalities. The Institute of Chartered Accountants of India Page 11 of 24
Cr Creat ate login in to creat ate e new new product under the Produ ducts menu. Typ ype Cho hoose the he de desire ired cate ategory. 2 1 duct regi gistration ty type pe by clicking the drop- For r Ex Excisable Pr Product fr from; Select a produ down list 1. Carbonated drinks 2. Electronic smoking device and tools • Excisable product for re-export 3. Liquids used in electronic smoking device and tools • Excisable product for sale in the UAE 4. Energy drinks • Non-Excisable product for sale in the UAE 5. Sweetened drinks • Non-Excisable product for re-export 6. Tobacco and Tobacco products For r Non-excisable pro roduc uct: 1. Beverage 2. Food 3. Others The Institute of Chartered Accountants of India Page 12 of 24
Creat Cr ate login in to creat ate e new new product under the Produ ducts menu. Bas Basic ic Prod Product Informatio ion 3 (Global Trade Item Number [GTIN], Product Description, Brand Name and Country of Manufacturing). No Note: All these attributes are mandatory, so they must be filled out in order to proceed to the next Product Images Prod 4 Mandatory images - Front, Nutrients and Bar Code Note: Only images as prescribed by Brand Sync would be accepted No Detail De iled Prod Product Info formation 5 Each attribute for each section is required to be filled. Category, Functional Name, Net Content, HSN Code, Ingredients. Product Pric Prod Price Informatio ion 6 Here, you must fill out all the price attributes. The Ret Retai ail l Sell ellin ing Pric ice must exclude the VAT and the Excise Tax. Select the retailer's name, each retailer must be different. Upload the copy of the rec eceip ipt, t, the receipt must be in PDF format. Page 13 of 24
• JPEG (.jpeg/.jpg), or PNG (.png) format • Image pixel dimensions of at least 1000 or larger in either height or width preferred • Maximum Image Size: 4000x4000px. • You can upload a rectangular image as long as its shortest edge has minimum 1000px and the longest has 4000px. • sRGB or CMYK color mode The image must: • be e-commerce suitable • Be a professional photograph • not contain gratuitous or confusing additional objects. • be in focus, professionally lit • fill 85% or more of the image frame. • have a pure white background • not contain additional text, graphics, or inset images. Contain logo, brand name, functional name, and if applicable, the sub • brand and variant of the product. The Institute of Chartered Accountants of India Page 14 of 24
The Ret etail Sel elling Pr Price - Is the base price of the product, excluding Excise Tax and Value Added Tax. Shelf Pr Price - is the final selling price including the Excise Tax and VAT 15 Shelf lf Pric ice Less ess VA VAT 15/1.05 = 14.29 Less ess Exc xcis ise e Tax x (50%) 14.29/1.5 = 9.53 Ret Retai ail l Sel elli ling Pric ice 9.53 The Institute of Chartered Accountants of India Page 15 of 24
Exc xcis ise Tax ax is s calcu alcula lated on on the he tax ax bas base Th The e tax ax bas ase is s the higher of of . Price list t publ blished by the FTA TA ; or or Des esign gnate ted Retai etail Sel elling g Price (DRSP) The DRS RSP P is the highe gher of: The recommended selling price declared / af affi fixe xed by impo porter / producer The av average ge retail selling g price of the goods in the marke arket The Av Average Retail Selling Price is: 03 Av Average ge tax ax bas ase of of the e goo oods ov over a a 12 2 mo months peri eriod The calculation for for average sel elling pric rice is provided in the next slide Page 16 of 24
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