SATT seeks details of foods to be VAT zero-rated

SUPERMARKET Association (SATT) head Rajiv Diptee has asked the Ministry of Trade and Industry for specific details of which food items will be added to the zero-rated VAT list after about a dozen broad classes were spelt out by Finance Minister Colm Imbert in the budget on Monday.

Imbert promised immediate relief to consumers from November 1, by expanding the list of basic food items that are exempted from Value Added Tax VAT, including "basic food items such as biscuits, cooking oil, canned vegetables, cornflakes, canned fish, canned meat, curry, juice, sausages, ham, ketchup, bottled water and pigtail."

However, some of these classes of items are hinted at as being already zero-rated in the Value Added Tax Act, schedule two. Among 20 items already listed were: corned beef, curry and sardine.

A 2016 Ministry of Finance notice said which specific items would or would not be zero-rated within several classes and this might provide some guidance as to Imbert's current intentions.

The 2016 list said within the class of processed meat, corned beef was zero-rated but not luncheon meat. Under processed fish, the main zero-rated tinned fish item stated in 2016 was sardines (along with smoked herring and salt fish which are not sold in tins). The list said VAT was applied to "salmon, crab, shrimps and prawns."

While curry was zero-rated in the 2016 list, similar items such as "black pepper, cinnamon, masala, nutmeg etcetera" are subject to VAT.

The notice said loose and dried legumes were VAT-free but tinned peas and beans were still subject to VAT in 2016, even as Imbert has now promised a zero-rated for tinned vegetables.

One recent consumer's grocery list obtained by Newsday showed VAT charged on mackerel as an item of tinned fish, but not on sardines.

VAT was charged on jerk seasoning and all-purpose seasoning as an item similar to curry, but not on curry. The bill also showed VAT improperly charged on corned beef.

Diptee told Newsday he has not yet got a reply from the Trade Ministry even as food importers/distributors urgently need details of items to be VAT zero-rated as of November 1.

Of the new exemptions promised by Imbert, Diptee said curry seemed redundant. Asked of Newsday's observation of a grocery charging VAT on corned beef, he advised consumers to identify their complaint to the supermarket's management and if need be to the Consumers Affairs Division of the Trade Ministry and also the Fair Trading Commission, with supporting evidence.

Asked his reaction to the 13 new items Imbert is adding to the 20-item VAT-free food list, Diptee said, "I could justify hundreds of items as being essential to the consumer."

He thought the new VAT-exemptions were empathetic and a good move, while saying there remains scope for further consideration by the Government.

Asked what new items he thought should be VAT-free, he replied: white sugar, detergent soap powder, dish washing liquid, peanut butter, jam, pet food, disinfectant, bleach, adult disposable diapers and Ramen-style noodle pack soup.

Current VAT-free items:

Any:

(a) unprocessed food of a kind used for human consumption;

(b) parboiled and brown rice;

(c) all-purpose and wheat flour;

(d) whole, skimmed, lactose-free milk, pasteurised milk, evaporated, dry or powdered

milk, and dry or powdered skimmed milk

(e) margarine;

(f) white and wholewheat bread;

(g) baby formulas and baby milk substitutes;

(h) cheddar cheese and rennet-free cheese;

(i) corned beef;

(j) curry;

(k) sardines;

(l) smoked herring;

(m) toilet paper;

(n) yeast;

(o) baking powder;

(p) uncooked or unstuffed pasta

(q) brown sugar