You cannot issue tax invoices to consumers since the law does not allow this.
(You must of course issue a VAT tax invoice to your buyers who are VAT dealers).
If you make sales to consumers, you must arrange to keep daily records of the value of your gross sales at each tax rate and exempt sales separately.
You need not separately record the VAT, but you must retain any cash register record or other record of sales made. (See VAT leaflet 01 "Value Added Tax Guide").
Examples of a tax invoice (Appendix-I), a commercial invoice (Appendix- II), purchases (Appendix-III) and sales records (Appendix-IV & V) that should be maintained are annexed to this leaflet.
There are no prescribed registers for this purpose. You can maintain accounts as per normal accounting procedures. However, the details stated in Appendix-III must be recorded in your accounts.
You can claim credit for input tax paid on your purchases on the basis of tax invoices you received for the taxable goods. You cannot claim input tax credit for purchases of goods specified in the negative list in the AP VAT Rules 2005.
For sales of taxable goods you must total the gross receipts for the day at each tax rate. The amount of VAT included in the value of the sales of the goods can be calculated by applying the tax fraction to the gross receipt of the day at each tax rate. This will identify the amount of VAT included in the gross value of the sales you have made (See Appendix-V).
The tax fraction is a formula, which calculates the tax element where goods are sold at tax inclusive prices, i.e., where the VAT is not shown separately.
a) The tax fraction is a formula, which calculates the tax element where goods are sold at tax inclusive prices, i.e., where the VAT is not shown separately.
b) It is calculated by reference to the rate of VAT currently specified in the law. It is calculated from the formula:
R .
R+100
R is the tax rate.
For example with a rate of 4 percent the fraction is:
4 .= 4 = 1 .
4 + 100 104 26
If the rate were 12.5% percent, the fraction would be:
12.5 .= 12.5 = 1 .
12.5 +100 112.5 9|
If part of your sales are to VAT dealers use the sales account (Appendix -IV) to calculate the tax due from sales to VAT dealers. VAT due from sales to consumers / non-VAT dealers should be calculated from the gross receipts using the sales account (Appendix-V).Copies of all VAT invoices issued must be retained in date order.
If your sales are only to consumers, calculate the tax due from the daily gross receipts (Appendix-V).
At the end of the month you total the columns in your sales accounts as follows; (Appendix-V).
The value of any exempt sales (Col .6 Appendix-V) goes in box 12(A) of the VAT return.
The value of your taxable sales @ 4% to consumers, exclusive of VAT (Col. 3C Appendix-V) goes in Box 16(A) of the VAT return and VAT on the above (Col.3B Appendix-V) goes in Box 16(B) of VAT return.
The value of your taxable sales at 12.5% (Col. 4C Appendix-V) goes in Box 17(A) of the VAT return and VAT thereon (Col.4B Appendix V) goes in Box 17B of the VAT return.
The value of your taxable sales at 1% ( Col.5C Appendix-V) goes in Box
19(A) of the VAT return and VAT thereon (Col.5B Appendix -V) goes in Box 19(B) of the VAT return.
You must identify such goods from your purchase invoices and ensure that they can be probably accounted for at the appropriate VAT rate or exemption when the goods are sold. You can either provide a list of goods liable at different rates with a note of the appropriate rate at the cash point or colour code the goods to identify the VAT rate to the cashier or use the bar coding on your cash register machine, or use any other method you choose.