The regions in which the Value Added Tax is used as one of the tax collection strategy, there are some commodities which are exempted from it. These products are called zero rated supplies or goods. The VAT returns Consulting seems to be working in parallel with the stock exchanges to show how important it is. According to the numbers brought in by VAT Implementation Services have shown to be skyrocketing and businesses having their stocks in zero rated supplies are booming because they don’t have to pay any VAT whatsoever.
There is a variety of zero rated goods and services which are reported to be exempted from VAT worldwide. One cannot say that this is just a generic category because each and every item or service is already marked. For instance, the European Commission exempts services such as insurance services, financial services, and land building supplies. There is another category of zero rated goods which comprises those services which are of public interest for instance, medical and health insurance, educational funds and social services.
Before we leap on to explaining the zero rated goods any further, let’s see how it is calculated on a global scale. Whenever a consumer brings a shipment, either individually or in the name of any organization, he is liable to pay VAT in addition to the shipping cost and other taxes. This added cost further determines the rate per product. When it comes to zero rated goods, no such extra tax is to be paid by the person who is bringing in the shipment which in turn lowers down the extra cost.
Breaking Down the Zero Rated Supplies:
The same situation when viewed under the UAE VAT returns, on one side projects the positive steps being taken by the government to expand the revenue stream. On the other hand, it has also categorized the zero rated goods. Below is a list of most common zero rated goods:
- Foods items.
- Charity items.
- Donated items.
- Printed publications.
- Kids’ clothing.
The VAT Implementation Services has managed to formulate pretty strict rules bringing into the VAT circle, those manufacturers who bring in zero rated raw material and benefit from charging extra from the consumers. In order to avoid the legal battle, such manufacturers tend to hire several credible VAT returns consulting firms. However, the cases end up with the manufacturers losing the battle and paying the VAT to the government.
If the whole situation is viewed on a global scale, the zero rated products have an overall lesser total purchase price. These products tend to save a lot of money of the consumers because they don’t need to pay a penny extra than the one prescribed. So, that is why people throughout the world are enjoying the availability of basic necessities since no one can curb their right to have access to the goods of public interest.