Exemption from registration for sales tax is permitted for those whose operations are specified in Schedule A under the Sales Tax (Persons Exempted from Payment of Tax) Order 2018.
In the exercise of the powers conferred by subsection 20(1) of the Sales Tax Act 2018 [Act 806], the Minister, on September 1, 2022, gazetted the Sales Tax (Exemption from Registration) (Amendment) Order 2022 (P.U. (A) 277/2022). It would go into effect on September 2nd, 2022.
As a result of the amendment order above, the Schedule A of the Sales Tax (Exemption from Registration) Order 2018 has been revised to provide improved clarity about the classes of activities that may be eligible for an exemption from sales tax registration.
The exemption Paragraph in the Sales Tax (Exemption from Registration) Order 2018 has also been changed to clarify the requirements that must be met for a person to be eligible for the exemption. These requirements are as follows:
Please take note that the activity of "cleaning operation by removing dirt or dust without any further operations" has been added to Schedule A.
In contrast, the following activities have simultaneously been withdrawn from Schedule A:
The incorporation of goods into buildings.
The installation of air conditioners in motor vehicles.
The manufacture of jewellery and goldsmiths wares.
The extraction of gold from mineral ores.
The recovery of gold from jewellery and/or the refining of gold
The amendment order has made it more evident what happens when a person's operation is one of several in a manufacturing chain that produces goods and when a person runs two or more manufacturing operations that don't have anything to do with producing products.
Amended SCHEDULE A
The developing, printing of photograph, production of film slides or any forms or combination of any of those activities.
Engraving, printing, drawing, writing, embossing or any other similar activities on taxable goods with a description relating to the sports record or other circumstances under which the taxable goods was donated or awarded.
The manufacture of ready mixed concrete.
The preparation of foods or drinks by —
any person who provide services under Group B, First Schedule, Service Tax Regulations 2018 [P.U.(A) 214/2018]; or
central kitchen for distribution to its premises which provide services under Group B, First Schedule, Service Tax Regulations 2018 [P.U.(A) 214/2018].
The preparation of tarred metal, tarred screening, and hot mixed preparations of bitumen and metal for road construction.
The production of copies of documents by the copy machine or similar copying process.
The repacking of the same bulk goods into smaller packages.
The repair of second hand or used goods.
The testing of eyesight, the prescription of suitable lenses and the installation of such lenses into frames.
The following operations when performed by a person other than a registered manufacturer:
the varnishing and/or polishing of finished pieces of furniture;
the installation of glass tops and/or glass doors to pieces of furniture otherwise complete.
The reduction of size and/or changing of the shape without changing the nature of such taxable goods.
The rendering of personal tailoring service but excluding tailoring service provided by company engaged in the business of manufacturing garments and other textile articles.
Printing, sewing or pasting of logo, knitting, crocheting or embroidering on ready made garments.
The colouring of cloth supplied by another person without changing the size or shape of the said cloth.
The manufacture of batik fabrics using traditional techniques of manual block printing, manual screen printing and/or hand drawing or painting and the articles thereof.
A cleaning operation by removing dirt or dust without any further operations.”.
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