Concerns over prepayment of GST raised in parliament

A motion has been submitted to parliament raising concerns of businesses having to pay GST to the State before payments for goods and services are received.

Opposition Maldivian Democratic Party (MDP) MP for Keyodhoo Mohamed Niushad submitted the motion to parliament today, which said that the current stipulations in the law on deadline to pay GST poses significant loss to businesses.

The motion states that as per Article 17(a) of the GST Act, GST is owed at the time that a tax invoice for the price of the good or service is made and when part of the payment for the good or service is made. This results in GST being owed when the tax invoice is made, but businesses failing to receive the payment for the good or service, it said.

The motion states that while it is not in the power of the seller to ensure receipt of payment for goods and services, it is not just to have them pay GST to the State in these circumstances.

The motion goes on to State that businesses have said that although the tax invoice for goods and services provided to government companies is submitted, the companies fail to settle the payment for long periods of time. However, if in such an instance, a business does not pay GST for that good or service as they haven't received the payment, the business is still considered by the State as having failed to pay GST.

This then leads to State and government institutions no longer using the business for goods and services, causing further loss. The motion describes this as an economic crime.

The motion calls for the issue to be debated in parliament as it could cause loss of employment to many, adversely affect the economy and people's livelihood.