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Is the VAT paid during the import of chicken meat refundable?
Is the VAT paid during the import of chicken meat refundable?
The enterprise is engaged in the import of chicken meat and its sale without being subject to any processing operations. During 2024, the enterprise imported chicken meat worth 150,000 manats, and 27,000 manats of VAT was paid at customs. Although the sale of chicken meat is exempt from VAT, the enterprise sold the imported meat products by applying 18 percent VAT. In this case, does the enterprise have the right to offset the VAT amount paid at the time of import?
The State Tax Service under the Ministry of Economy reported that the sale of animal and poultry meat, including animal and poultry meat subjected to slaughtering and freezing operations, is a VAT-exempt transaction pursuant to Article 164.1.37 of the Tax Code, and the VAT amount paid during the import of such products is not creditable; non-creditable VAT amounts are included in the cost of the goods.
At the same time, according to the provisions of Article 159.8 of the Tax Code, if VAT-exempt transactions are carried out with the application of VAT, such transactions are considered taxable transactions for VAT purposes.
In the case specified in the inquiry, the sale of poultry meat that is exempt from VAT with the application of VAT is considered a VAT-taxable transaction in accordance with Article 159.8 of the Tax Code, and 18 percent VAT is calculated on the full sale value. In this case, the VAT amounts paid upon the import of poultry meat sold with VAT are credited in accordance with Article 175 of the Tax Code.
The above matters are regulated by Articles 159, 164, and 175 of the Tax Code.
The enterprise is engaged in the import of chicken meat and its sale without being subject to any processing operations. During 2024, the enterprise imported chicken meat worth 150,000 manats, and 27,000 manats of VAT was paid at customs. Although the sale of chicken meat is exempt from VAT, the enterprise sold the imported meat products by applying 18 percent VAT. In this case, does the enterprise have the right to offset the VAT amount paid at the time of import?
The State Tax Service under the Ministry of Economy reported that the sale of animal and poultry meat, including animal and poultry meat subjected to slaughtering and freezing operations, is a VAT-exempt transaction pursuant to Article 164.1.37 of the Tax Code, and the VAT amount paid during the import of such products is not creditable; non-creditable VAT amounts are included in the cost of the goods.
At the same time, according to the provisions of Article 159.8 of the Tax Code, if VAT-exempt transactions are carried out with the application of VAT, such transactions are considered taxable transactions for VAT purposes.
In the case specified in the inquiry, the sale of poultry meat that is exempt from VAT with the application of VAT is considered a VAT-taxable transaction in accordance with Article 159.8 of the Tax Code, and 18 percent VAT is calculated on the full sale value. In this case, the VAT amounts paid upon the import of poultry meat sold with VAT are credited in accordance with Article 175 of the Tax Code.
The above matters are regulated by Articles 159, 164, and 175 of the Tax Code.