st Dec With effect from 1 st ecember 20 2019 Speaker: CA Anurag - - PowerPoint PPT Presentation

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st Dec With effect from 1 st ecember 20 2019 Speaker: CA Anurag - - PowerPoint PPT Presentation

Oct 04, 2022 357 likes •627 views

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

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With effect from 1st

st Dec

ecember 20 2019 Speaker: CA Anurag Chaturvedi, Secretary ICAI Dubai Chapter

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Cabinet Decision No.52 of 2019

  • n Excise Goods, Excise Tax

Rates and the Methods of Calculating the Excise price

Your Eligibility to Register List Products Documentation & Reporting

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

www.icaidubai.org

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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

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Ca Cabinet t Dec ecision no.

  • . 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

  • f Exci

xcisable Goo

  • ods to
  • include the foll
  • llowing:

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. Excise is extended on the following products,

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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

  • f the

e GS GSO) or

  • 2. Other sweeteners (as determined under

Standard 995 95 of

  • f 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

  • f the

e GS GSO) wi will not

  • t fa

fall under the scope of excise tax.

The Institute of Chartered Accountants of India

Page 4 of 24

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Excise Tax is the res espon

  • nsib

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

In certain cases Holds exce excess’ excise good in stock for free circulation in the UAE If you are an importer of excise goods If you produce any excisable goods. a person releasing excise goods from a designated zone.

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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.

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No Threshold. As an importer of excisable goods, you must register

  • n or before the date of law coming into effect.

No threshold. If you are producer of excise goods, you must register

  • n 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

  • n goods previously kept in DZ. Warehouse keeper will be jointly

liable, for due tax.

Are you an excise registrant?

Tourist in excess of excisable goods of AED 3000. Any person who is releasing excisable more than 2 times 12 months.

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Are you an excise registrant?

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

  • r
  • 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.

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.

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Ca Calculation: : Average Stock

Its average monthly stock holding for the period 1 December 2018 – 30 November 2019 is as follows: 130 units x 5 months = 650 150 units x 5 months = 750 230 units x 2 months = 460 Avera rage month nthly st stock leve evel l = (650 + + 750 + + 460) ) / 12 = 155 uni nits ts

Ca Calculation: : Average Sales

During the period 1 December 2018 – 30 November 2019, Coffee Shop LLC sells: 90 units x 3 months = 270 110 units x 9 months = 990 Average monthly sales volume = (270 + 990) / 12 = 105 units Two times ave verag rage e month nthly ly sa sale les s volu lume e = 210 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)

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Register Taxable person and Excisable Goods.

The Institute of Chartered Accountants of India

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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

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1 2

Cr Creat ate login in to creat ate e new new product under the Produ ducts menu.

Typ ype

Select a produ duct regi

gistration ty type pe by clicking the drop-

down list

  • Excisable product for re-export
  • Excisable product for sale in the UAE
  • Non-Excisable product for sale in the UAE
  • Non-Excisable product for re-export

Cho hoose the he de desire ired cate ategory.

For r Ex Excisable Pr Product fr from;

1. Carbonated drinks 2. Electronic smoking device and tools 3. Liquids used in electronic smoking device and tools 4. Energy drinks 5. Sweetened drinks 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

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4 5

Prod Product Images

Mandatory images - Front, Nutrients and Bar Code No Note: Only images as prescribed by Brand Sync would be accepted

De Detail iled Prod Product Info formation

Each attribute for each section is required to be filled. Category, Functional Name, Net Content, HSN Code, Ingredients.

6

Prod Product Pric Price Informatio ion

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.

3

Bas Basic ic Prod Product Informatio ion

(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 Cr Creat ate login in to creat ate e new new product under the Produ ducts menu.

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  • JPEG (.jpeg/.jpg), or PNG (.png) format
  • Image pixel dimensions of at least 1000 or larger in either height
  • r 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

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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

Shelf lf Pric ice 15 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

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03

The Av Average Retail Selling Price is: Av Average ge tax ax bas ase of

  • f the

e goo

  • ods ov
  • ver a

a 12 2 mo months peri eriod Th The e tax ax bas ase is s the higher of

  • f .

Price list t publ blished by the FTA TA ; or

  • r

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

Exc xcis ise Tax ax is s calcu alcula lated on

  • n the

he tax ax bas base

The calculation for for average sel elling pric rice is provided in the next slide

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Mont nth Ret etail Sel elling Pr Price** Qt Qty Tot

  • tal sale

Jan 22 1500 33000 Feb 33 500 16500 Mar 55 700 38500 Apr 44 500 22000 May 58 400 23200 Jun 34 150 5100 Jul 65 200 13000 Aug 45 1200 54000 Sep 44 1100 48400 Oct 42 400 16800 Nov 56 360 20160 Dec 32 274 8768 Total 728 284 299 99428 Average Retail Selling Price = (Total Sale / Total Qty) 41.10

** Exclusive VAT AT / Excise Ta Tax

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Excise Price of the goods as per the Valuation provisions

The Institute of Chartered Accountants of India

FT FTA A Pric ice 40 Rec Recommend nded d sel selli ling pric ice 39 Avera rage Sell ellin ing Pric ice 41.10 Desig esignate ted Sell ellin ing Pric ice 41.10 Excise se Pric ice 41.10

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A person dealing in excisable goods is required to file various declarations. You shall file and pay due excise tax before due date of each tax period

The Institute of Chartered Accountants of India

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Declaration for import of Excise Goods that require Customs Clearance Tax Liability on Release from Designated Zone not requiring Customs Clearance Tax Liability on production Deductible Tax form

Ca Category Ac Activity Declaration A Taxable person Release Goods from Freezone 201/202C* Transfer 203 Export 203 Producer Produce excise goods in free circulation 202B* a Production declaration

declaring everything which has been produced during that month, at the end of every month

Importer Import of goods to Freezone 201/202C & 203 If a person imports excisable goods, he must login to eservices portal to file his declaration EX 201. He will be required to register if he imports more than 2 times in 12 months or 3 times in 24 months.

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Complete all declarations. Once you have completed your Excise Tax Declaration, Liability, and Deductible forms (as relevant to your business activities), values will be auto-populated in to the return,. Submit return and pay Excise Tax. The only amount to be entered in this form is the value of stockpiled excise goods and excise tax due on stockpiling.

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No Non-Exc xcisab able e produ duct reg egis istr trat atio ion - Import rter An importer shall mandatorily register a Non- excisable product else imports would be denied. No Non-Exc xcisab able e produ duct reg egis istr trat atio ion - Manufac actu ture rer As per the Excise Tax provisions and clarification, the Manufacturer has to register the excisable products manufactured in the UAE.

Altern rnative product t regi egistra ration

Alternative products to sugar such as Honey, Date Syrup etc. The need analyze and understand whether such products are excisable.

Ret etail Sale Pr Price of

  • f pro

roduct not

  • t sold
  • ld in the retail mark

rket.

The retail sale price of the product imported and not sold in the retail market is the import price declared at the time of import.

The Institute of Chartered Accountants of India

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Specific Cu Customs Tari riff Heading

Specific over residual classification is recommended. Chances of the residual classification registered with the FTA as an excise product falling within the 6 categories of products eligible to excise tax is higher. The Customs then insist that the product be registered as a non-excisable product and the imports may suffer demurrage charges

Manufacturer / distributor insist that product doesn’t cont ntain sug ugar.

Instances where the Manufacturer / distributor doesn’t register the product as a sugared beverage then declaration should be sought from them as safeguard against any Excise Tax Demand

Pr Procurement by by Hotel els –St Stockpiling

The base price or the Designated Retail Selling Price is the cost price at which the goods were procured from the distributors / manufacturers .

The Institute of Chartered Accountants of India

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Is Honey y Ex Excisable

Honey is natural commodity like sugar therefore its not excisable.

The Institute of Chartered Accountants of India

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