VAT

Company ABC applied for VAT group registration with one sole proprietorship (Establishment) member in 2018, at the starting of VAT implementation. The company got the VAT group TRN and after 2 years there was some conflict between group members. Hence, Representative members closed business and run away from the group(without completing the de-grouping/de-registration process). Now Sole Establishment wants to separate/de-register from the group. But it has not had revenue details, which have been submitted during the periodically returns. Hence, when it is applying for de-registration, FTA is asking for financial (turnover details).

Current situation: -

  1. Representative member is not available (Business stopped and there is no business)
  2. Since last 2020, there are no VAT filings. VAT filings are pending for the last year.
  3. The sole establishment firm wants to leave the group (It is conducting business but not charging VAT). It wants to go for standalone VAT TRN.

As a member of a group, it is a sole establishment, which does not fall VAT group eligibility conditions. Is it possible that absence of the representative member, can Sole Establishedment leave/remove from group?

Kindly do suggest.

Replies
SAJITH N10/04/2021 11:42:58

Firstly to say that no revenue details are available for the returns file previously is no excuse at all. As part of the Tax Group each member should ensure that all compliances are met with and details retained as a matter for prudence. For removal from the group, presuming you have access to FTA portal, apply for removal and take this matter up with FTA during the process. Considering that no VAT filings have been done for past one year, they could insist that all pending submissions have to be done. Also, you can expect penalty for not charging VAT on your supplies (it is mentioned that sole establishment is carrying on business but no VAT is being charged).

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