Increase in GST rate on scheduled tourism service providers |29 October 2010

In 2007, the GST rate for helicopter transport services was changed from 15% to 7%. But since November 2008, tourism service providers have been liable to a GST rate of 10%.

Will there be a change in the GST rate for tourism service providers this year?
The Minister of Finance announced in his 2009 budget that the rate of GST for tourism service providers would increase from 10% to 12% in 2010.

What is the specific effective date for the new GST rate?

The new GST rate of 12% becomes effective on November 1, 2010. However, it is important to note that for services provided to clients before this date – where actual payment for the service was received on or before November 1 – the GST liability will be limited to the existing rate of 10%. It is important that proper records are kept of all services provided before November 1 and paid at the old rate of 10%.

Who are the tourism service providers to be affected?
The following tourism service providers as per schedule 2, part 2 of the GST Regulation 2003 will be liable to the new GST rate of 12%:

• Hotels, guesthouses or self-catering establishments
• Cafés or restaurants
• Airline transport services
• Fixed rotary wing air transport services
• Domestic ferry services
• Boat or yacht charter services (including live-aboard)
• Car hire operators
• Underwater dive operators or dive centres
• Water sports operators
• Travel agents (own services)
• Tour operators (own services)
• Tour guides and/or tourist guides
• Equestrian operators

How to calculate GST with the new rate of 12%
GST on services is calculated on the receipted amount of the services as follows:
Receipted amount minus (receipted amount divided by 1.12)
                                           
For example if the sale/income for a given month is R10,000, the GST due is as follows:

R10,000 – (R10,000) = R1,071.43
                                                           1.12
This amount has to be remitted to the Seychelles Revenue Commission (SRC), using the Business Activity Statement, on or before the 21st of each month.

Where do I go for more information?
Should you require further information or clarification on the applicability of the new GST rate, please contact the SRC Advisory Centre in Room 2 at Oceangate House or telephone 293741/42/43.

Contributed by the Seychelles Revenue Commission