Deferred payment for importation of capital goods for Vat-registered businesses |28 March 2013

The Vat deferred payment is a benefit for all Vat-registered businesses whereby the payment of Vat on large capital items imported can be deferred. This means that the Vat payable on these capital goods will not be paid at the point of entry (at Customs) but reported as an output tax and input tax on the next Vat return. Input tax is immediately offset against output tax, giving a neutral effect. This creates a cash flow benefit for businesses, and for the Seychelles Revenue Commission (SRC) it removes the administrative burden associated with having to refund the Vat paid in the following month.
 
What are the types of goods that qualify for deferred payment?
The deferred payment facilities apply to capital goods imported by all Vat-registered businesses, being any tangible items, not being construction materials, that are normally treated as an asset on the balance sheet and have a useful life dependency of two years or more.  The capital goods must be either:

• An Individual item – one capital good - with a CIF value of SR100,000 or more; 
 
• A group or groups of identical items a total CIF value of SR100,000 or more together. The group items must feature on the same Bill of Entry with the same HS code.
 
Examples of capital goods for a tourism establishment:

• A caterpillar for a Vat-registered construction company

• 50 wooden beds featuring on the same Bill of Entry for a Vat-registered tourism establishment amounting to SR100,000 or more together.

Note:  if the capital good is imported with some accessories which are part of the main import using the same HS code, then it must be clearly stated when giving the description of the goods.

How to apply for deferred payment
Businesses simply need to fill the Request for Deferred Payment Form which is available on SRC website: www.src.gov.sc. A printed copy can also be obtained at any SRC offices. On the reverse of the form there are step by step instructions on how to make the request for deferred payment.

When to apply for deferred payment
The Vat-registered business must apply to the Revenue Commissioner two weeks before the importation of the specific goods enter the country.  An application must be submitted for each importation of the capital goods which meets the deferred payment conditions and/or each time the facility is used. It is advisable that the Vat-registered business respect the two weeks given for making a deferred payment application to avoid any inconvenience when the goods enter the country. 

What are the documents required to be submitted with the application?
Upon application the Vat-registered businesses must ensure that the following documents are attached with their form:
• Invoice
• Bill of entry - if available (ready) at the time of application.

It is important to note that upon application the Vat-registered business must ensure that all necessary information must be given and clearly stated to avoid unnecessary delay in processing the application. Information that is needed is:
• HS code of the goods;
• A specific description of the capital goods;
• Quantity of the capital goods;
• CIF value of the capital goods;
• CIF value of a group of items with the same HS code and the sum of the CIF value must be above SR100,000.

 What are the conditions for deferred payment?
 The Vat-registered business must meet the following conditions to qualify for deferred payment:
• The business must file its Vat return on time (monthly for compulsory and quarterly for  voluntary)
• The imported capital good must meet the criteria
• The business must have a good compliance record where already in existence, not committed any violation or offence under both the Revenue Administration Act and Customs laws/Regulation for the past 3 years.
 
What are the responsibilities of the Vat-registered businesses when making an application for deferred payment? 
It is the responsibility of the Vat-registered business to comply with the conditions of this facility. It is therefore important to make a correct declaration and to meet all the requirements as specified above.
It is important to note that the approval for deferred payment is granted based on the information provided by Vat-registered business and any material omission or misrepresentation in the application makes the approval nil and void.

For more information
You can contact Seychelles Revenue Commission on hotline number 4293745 or e-mail us at vat@src.gov.sc. The Value Added Tax Act 2010 and the deferred payment leaflet are available on the Seychelles Revenue Commission website (www.src.gov.sc).