By Miss Prunella Vassell, ContributorThe following is part III of a public education series on the taxation assessment and objection process by the Institute of Chartered Accountants of Jamaica (ICAJ). By Prunella Vassell
IN OUR two preceding articles, we looked at the assessment and objection process as it related to Income Tax. In those articles we dealt with the different types of assessments to which persons may be subject, the procedure that should be followed where the Revenue raises assessments and the recourses available in such instances. This week we look at the processes as they relate to General Consumption Tax (GCT).
GENERAL CONSUMPTION TAX
General Consumption Tax (GCT) is an indirect form of taxation. This means that it is not levied directly on the person who ultimately bears the burden of the tax but on the goods or services purchased or utilised by those persons. The person supplying the goods or service is primarily responsible for collecting the tax and for accounting to or paying over to the revenue the tax so collected. GCT as enacted in Jamaica is a value added tax, which means that the tax is calculated on the value, which accrues to the supply at each level of the production and distribution cycle. It is the ultimate consumer who bears the burden of the tax as during the production and distribution chain any tax on inputs is recovered against any tax collected on output. Under Section 33 of the General Consumption Tax (GCT) Act a Registered Taxpayer is required, within a prescribed period (either monthly or every two months), whether or not he makes a taxable supply during any taxable period: -
To file a return in a form approved by the Commissioner of Inland Revenue, containing such particulars as may be prescribed of the value of his supplies, the amount of the GCT output tax and the amount of input tax deducted there from; and
Pay to the Commissioner the amount of the net tax, if any, computed as payable in respect of the taxable period to which the return relates.
On receipt of the return the Commissioner may require a registered taxpayer or his trustee to furnish such other information relating to the return, as he considers necessary to assist him in validating the return.
Under section 38 of the Act where a registered taxpayer -
Fails to furnish a return as required by the law; or Furnishes a return which appears to the Commissioner to be incomplete or incorrect,
And the Commissioner -
Is not satisfied with the calculations on any return or the basis on which the return is prepared, he may within six (6) years, after the taxable period, cause an assessment to be made in writing of the amount that in the opinion of the Commissioner Taxpayer Audit and Assessment, the registered taxpayer ought to have paid; and that Commissioner must in any such assessment, state the general basis on which the assessment is made.
If goods are disposed of and no proper account is given of same, the Commissioner of Taxpayer Audit and Assessment may, to the best of his judgement make an assessment of the tax chargeable on such goods.
Notice of any assessment made or alterations must be:
Served on the taxpayer concerned; and An assessment, subject to any determination on appeal, is deemed valid and binding notwithstanding any error, defect or omission therein.
AMENDMENT TO SECTION 38
In 2001, an amendment was made to Section 38, which gives the Commissioner the power to force register, any person and to impose the tax from the date that person is deemed to have been making taxable supplies. Under these provisions the Commissioner:
In accordance with section 28 must give notice in writing requesting that the person be registered; in the case of failure to comply with the requirement, the Commissioner will register the person; and
Can raise an assessment on such person from the date that it is considered such person ought to have been making taxable supplies and rendering returns.
In addition, where any person fails to register within the period of twenty-one (21) days of commencing a taxable activity, as set out in the Act, such person would be liable to pay a late registration fee of $5,000.00 if an individual and $10,000.00 for a company.
OBJECTIONS
Any person who disputes the assessment or any other decision of the Commissioner, may
Within thirty (30) days of the date of service of the notice of assessment make an objection in writing, for a review of the assessment or other decision; and should
State precisely the grounds of his objection
On receipt of the notice of objection the Commissioner may require the person giving such notice to -
Furnish such particulars or produce such books or records within such period (not less than thirty (30) days) as the Commissioner may specify; and appear, to answer any lawful questions relevant to the matters under consideration.
Where any person fails to comply with the requirement, the notice of objection served by that person shall cease to have effect and /or -
Where no valid objection or appeal has been lodged within the time specified for such objection or appeal, or
Where the amount assessed has been agreed to or has been determined on appeal, the assessment as made, agreed to or determined, in all the above cases shall be final and conclusive.
However, where a person has objected to an assessment made upon him -
If an agreement is reached the assessment is amended, if not the Commissioner must give notice in writing of his decision within six (6) months of receiving the objection.
If the Commissioner fails to hand down his decision within six (6) months after receiving the objection and the delay is not caused by the taxpayer, the assessment becomes null and void (section 40 (b) (4)) and ceases to have any effect.
It should be noted that as with Income Tax, GCT assessments may either be done by the Taxpayer or the Revenue and where done by the Revenue this can be either by way of an estimated assessment or an additional assessment. There is also the right to object to any estimated or additional assessments raised by the revenue and any decisions made may be appealed through to the Courts.
Miss Vassell is the Treasurer of the ICAJ and Chairman of its Public Relations/Publications Committee. She is an Associate at Paul Goldson and Company.
