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2020/12/08

Launch of Excisable Goods Stock Reporting Requirements

Tanvi Fal Dessai

Are you a Warehouse Keeper registered with the FTA or an Excise Tax Registrant? Then this article is for you. Federal Tax Authority needs you to follow the below process to declare your Opening Stock as of 1st January 2021.

Step 1: Warehouse keeper will have to Appoint Certified External Auditor to verify the Opening Stock of Excisable Goods

As a Warehouse Keeper of one or multiple Designated Zones, he will need to appoint a certified external auditor to audit the Opening Stock as of 1st January in each Designated Zone per Excise Tax Registrant. 

Step 2: As a Warehouse Keeper, he will need to Complete Declaration

After completing the opening stock audit, the warehouse keeper will need to fill in the Opening Stock Declaration Form. He will be required to submit one Declaration per Excise Tax Registrant per designated zone.

Step 3: The Excise Tax Registrants will approve Opening Stock Declaration (EX204)

Each Excise Tax Registrant will need to approve the Opening Stock Declaration once it has been submitted by the Warehouse Keeper. If the Excise Tax Registrant holds excisable goods in multiple Designated Zones, he will need to approve multiple declarations from the respective Warehouse Keeper that the Designated Zone belongs to.

Did you know? 

1. Only one (1) Opening Stock Declaration can be submitted per Excise Tax Registrant per Designated Zone by a Warehouse keeper. 

2. Once the Warehouse Keeper has submitted the Opening Stock Declaration; it will need to be verified and approved by the Excise Tax Registrant that owns the excisable goods. 

3. After the Opening Stock Declaration has been submitted and subsequently approved by the Excise Tax Registrant, the Declaration CANNOT be amended. 

4. All figures that are declared have to be verified by an external auditor and the auditor’s report has to be attached to the Declaration. 

5. You can start to prepare your Opening Stock Declaration using the excel template from 4th December 2020 onwards. The template can be found by accessing the opening stock declaration. 

6. Opening Stock Declarations CANNOT be submitted prior to 1st January 2021 and cannot be submitted after 31st January 2021.

Why is the FTA implementing this change? 

1. Supporting compliance activities aimed at reducing the illicit trading of excisable goods. 

2. To enhance the ability of the FTA inside Designated Areas to monitor Excisable Products.

3. To meet the compliance standards.

Implications 

1. Failure to submit an Opening Stock Declaration will set the stock held in the Designated Zone to be zero (0), which will restrict you from moving stock out of a Designated Zone. 

2. Variances in Opening Stock Declarations may lead to administrative penalties or Excise Goods being considered as released for consumption. 

Let us understand this better:

excise-tax-understanding

Scenario: 

ABC is a warehouse keeper, having Two designated Zones under him. I.e., Designated Zone (X) and Designated Zone (Y)

Now, Under Designated Zone (X), he has Two Excise Tax Registrants, and under Designated Zone (Y), he has Three Excise Tax Registrants.

The question is, how many Opening Stock Declaration Form Does ABC have to file.

Explanation: 

Since the Warehouse keeper isrequired to submit one Declaration per Excise Tax Registrant per designated zone, ABC has to file Five Opening Stock Declaration Forms.

*This process only applies to Excisable Goods stored inside Designated Zones.

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