No VAT on milk, except flavoured - GRA

The Guyana Revenue Authority (GRA) is calling on importers, wholesalers and retailers not to charge VAT on milk, regardless of the brand and added vitamins, except where the milk is flavoured. The GRA reiterated in a press release on Friday that only unflavoured cow's milk and milk powder are not liable to the Value Added Tax (VAT).

Schedule 1, paragraph 2 (q) (v) of the VAT Act zero-rates "cow's milk and milk powder, but not including other milk such as flavoured milk."

The VAT department has re-emphasised that no VAT is to be charged on cow's milk whether in boxes, cans or bags, once it is not flavoured milk (strawberry, banana, chocolate etc.). The position adopted by the GRA is that evaporated milk, liquid cow's milk inclusive of Ultra High Tempera-ture (UHT) milk and fully or partially skimmed milk are forms of cow's milk and, as such, along with powdered milk (skim and full-cream) are zero- rated. The department stated that while most milk including evaporated and UHT milk go through a process to reduce the fat content, prolong shelf-life or in some instances, where naturally occurring vitamins (A,D,E and K) have been lost through the reduction of fat, to reintroduce such vitamins, they are essentially cow's milk. Condensed milk, on the contrary, falls into the category of flavoured milk and is therefore subject to VAT.

"Importers, wholesalers and retailers are being urged by the GRA not to charge VAT on milk, regardless of the brand and added vitamins, except where the milk is flavoured."
The GRA added that it remains committed to working with stakeholders to ensure VAT is effective and that there is maximum compliance with the law so that Guyanese can enjoy the real benefits of VAT. Persons who have VAT queries may write to the Commissioner, VAT and Excise Tax Department, for clarification. Distribution Services Limited (DSL) in a letter in the April 28 edition of Stabroek News said it had written to the GRA on the matter of certain milks since January 4 and had not gotten a response. DSL said it had been forced to pay VAT in the meanwhile on certain non-flavoured milks and had protested over this.