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Sales Tax Act 2018: Amendment of Section 11B

Updated: Dec 9, 2023

"Section 11B – Application" is read as follows:-

Section 11B(1) The provisions of this Act, except as otherwise provided in this Part and subject to the modifications in the Schedule, shall apply to low-value goods.

Section 11B(2) Parts VIII, IX, IXA and XIII, and sections 3, 14, 15, 16, 23, 32, 35, 36, 37, 40, 41A, 43, 44, 45, 46, 47, 57A, 76 and 96 shall not apply to low-value goods.

In simple terms, Section 11B outlines how the rules and regulations in the Act apply to low-value goods.

Application of the Act to Low-Value Goods:

  • The general provisions of the Act apply to low-value goods unless specified otherwise in this Part (referring to the specific section of the Act related to low-value goods).

  • Any modifications to the application of the Act to low-value goods are detailed in the Schedule.

Exemptions from Specific Parts and Sections:

  • Parts VIII, IX, IXA, and XIII of the Act, along with specific sections (3, 14, 15, 16, 23, 32, 35, 36, 37, 40, 41A, 43, 44, 45, 46, 47, 57A, 76, and 96), do not apply to low-value goods.

  • This means that certain parts and sections of the Act, as listed, do not have relevance or are not enforceable concerning low-value goods.

In essence, Section 11B clarifies how the Act interacts with low-value goods, specifying where the standard rules apply and identifying exceptions or modifications for these particular goods.

Finance (No. 2) Bill 2023

The proposed amendment in the Finance (No. 2) Bill 2023 involves modifying subsection 11B(2) of the Sales Tax Act 2018.

The change substitutes the words "sections 3, 14, 15, 16, 23, 32, 35" with "sections 3, 14, 15, 16, 32."

This amendment implies that the specified sections related to low-value goods, particularly section 23 and section 35, are no longer applicable or relevant. The affected sections are as follows:

Info for Section 23 - Credit Notes and Debit Notes:

  • This section outlines the procedures related to the issuance and receipt of credit notes or debit notes by registered sellers for the sale of low-value goods. It involves making deductions or additions of sales tax in returns as necessary.

Info for section 35 - Power of Minister to Exempt and Refund:

  • This section grants authority to the Minister to exempt specific goods or individuals from all or part of the sales tax, subject to conditions.

  • It also addresses the exemption of registered sellers or manufacturers from charging and collecting sales tax and provides for the Minister's power to direct the Director General to make refunds.

Tax Impact:

  • The amendment to section 11B(2) excludes sections 23 and 35 from the list of sections that do not apply to low-value goods. Therefore, unless a specific provision in this Part (referring to the specific section of the Act related to low-value goods) indicates otherwise, sections 23 and 35 are now considered applicable to low-value goods.

  • In other words, the default application of the Act's provisions is extended to include sections 23 and 35 for low-value goods unless there is a subsequent provision within the Act that specifies otherwise in the context of low-value goods.

  • Businesses dealing with low-value goods should take note of these changes and ensure compliance with the applicable sections, including sections 23 and 35 unless exempted or modified by other provisions within the Act related to low-value goods.

  • The impact on businesses would depend on how these changes alter their obligations regarding credit notes, debit notes, exemptions, and refunds related to low-value goods.

In essence, this amendment modifies the scope of sections applicable to low-value goods, and businesses dealing with such goods may need to reassess their practices in line with the revised provisions.

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