To assist farmers with their cash flow, many of the products which are used or consumed in the course of conducting a farming enterprise are zero-rated, or exempt from VAT on importation. Some examples of goods that may be purchased at the zero rate are –
(please refer to Part A of Schedule 2 to the VAT Act for the complete list)
What are the requirements for buying goods at zero rate?
The following requirements must be met in order for the farming enterprise to purchase the goods in the mentioned Schedule at the zero rate:
- The farming enterprise must be in possession of a VAT registration certificate indicating the farming enterprise’s entitlement to purchase the goods listed in Schedule 2 at the zero rate;
- The aforementioned notice of registration must be presented the supplying vendor;
- The VAT registration number of person carrying on the farming activity must appear on the tax invoice issued by the supplying vendor ;
- The goods supplied must be specified in Part A of Schedule 2 to the VAT Act and must not be prohibited goods.