VAT H/W

Note 1

The sale of bottled beverages constitutes a supply as per s6(1) of the VAT Act.

The returnable containers are standard rated supply as defined.

Value of supply is the consideration less VAT.

Time of supply is the earlier of the invoice or payment.

Note 2

A supply made by an agent on behalf of a principal is deemed to be made by the principal

as per section 56(1).

Mega Watt is acting as an agent of the other supplier; therefore, they don’t need to

account for any output tax on the transaction.

The principal ie, the suppliers will charge VAT but only if they are registered operators.

For Mega Watt, the VAT consequences will only arise to the extent of the commission it

received from the suppliers.

Mega Watt will charge output tax on the commission received for the services they

would have rendered.

Value of supply is the consideration less VAT.

Time of supply is the earlier of the invoice or payment.

Note 3

Mega Watt imported goods from China and are thus liable for import VAT.

The goods will be charged import VAT at a standard rate.

The time of supply is the date the goods enter into Zimbabwe for home consumption.
The goods entered Zimbabwe on 10 November 2021 hence it is the time of supply.

Value of supply is the value for duty purposes plus duty.

This would be $650,000 for the tills acquired from China.

VAT is claimable when:

a. VAT was charged

b. When making taxable supplies

Mega Watt was charged VAT on the transport from the boarder to the operating site as

the transporter is vat registered.

Mega Watt is in the business of selling taxable supplies thus,

Input VAT can be claimed on the transport fees.

Note 4

The taxable service is being provided by a non-resident to a resident recipient

consuming the service in Zimbabwe (sec 2) and is therefore an imported service

According to section 6(1)(c), Mega Watt will be liable to remit output tax to ZIMRA

The time of supply is the earlier of payment by recipient or invoice.

Value of supply is the consideration paid or open market value whichever is greater.

The open market value is not given hence the value of supply becomes ZWL500,000

Mega Watt will also claim the input tax as they were charged and are making taxable

supplies.

Vat was charged on food as it is a taxable supply from a VAT registered operator

Mega Watt can claim input tax on the costs of food.