Pursuant to the sixth amendment to the Goods and Services Tax Act, the rate of TGST and GST will increase to 16% and 8% respectively, from 1 January 2023.
According to a circular publicised by the Maldives Inland Revenue Authority (MIRA), GST and TGST must be charged at the new rates if the “time of supply” of a transaction occurs on or after 1 January 2023.
“Time of supply” refers to the time at which a tax invoice, receipt, credit note or debit note is issued, or the time at which full or partial payment is made for a transaction — whichever comes earlier. A tax receipt or invoice must be issued within 3 days for all goods supplied, once the goods are either removed from the place of supply or made available to the recipient, and within 3 days for all services supplied, once the service has been completed.
Therefore, if a registered person supplies goods and services on a 24-hour basis, the rate of GST applicable to the value of supplies made before 00:00 hours on 1 January 2023 is 12% and 6% for the tourism sector and general sector, respectively. The rate of GST applicable to the value of supplies made on or after 00:00 hours on 1 January 2023 is 16% and 8% for the tourism sector and general sector, respectively.
MIRA has also advised taking necessary action to bring any system changes beforehand that may be required to charge GST at the new rates, and to have a ready arrangement to display the prices of goods and services inclusive of the new rates.