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Adjustment for Prepopulated Import of Goods

Chirag AgarwalChirag Agarwal    15 November 2021
Adjustment for Prepopulated Import of Goods

Do you know input tax on prepopulated import of goods can be claimed only if the ownership of the goods is being transferred before the physical delivery of the goods in the warehouse?

There are 2 situations for Prepopulated import of goods:

First situation is when the goods are being imported by the VAT Registered owneritself. AND

Second situation is when the goods are being imported by another person on behalf of the actual owner of the goods. Now another person could be an agent or the customer of the owner of the goods.

In the first situation, the imported goods are prepopulated in Box No. 6 and input tax for such importation of goods could be claimed in Box No. 10 after fulfilling the conditions for input tax recovery.

Hence for first situation imported goods shall be prepopulated in Box 6 and the same shall be reversed in Box 10.

In the second situation, where a VAT registered owner of the goods request another VAT registered person (importing agent) to import goods on behalf of the owner. In such situations, VAT registered importing agent would have given their TRN at the time of importation of goods, the VAT amount would automatically pre-populated in Box 6 of the importing agents. The VAT registered importing agent who acts as the importer on record would be required to make a negative adjustment in Box No. 7 and at the same time the VAT registered owner of the goods would be required to make a positive adjustment in Box No. 7 and entitled to recover the input tax.

For such adjustments, the owner and importing agent need to agree in writing to make the adjustments to substantiate the evidence to the Federal Tax Authority.

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Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. The view/interpretation of the publisher is based on the available Law, guidelines and information. Each reader should take due professional care before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.

You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the Law Section of GCC FinTax

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