All GST-registered businesses required to levy plastic bag tax
No tax will be levied on plastic bags used by the manufacturer to pack the goods to the level required for sale.
By
Aishath Fareeha Abdulla
All businesses registered with MIRA for Goods and Services Tax (GST) will be required to collect the newly introduced tax on plastic bags, according to regulations gazetted on Wednesday.
The Waste Management Act was amended and ratified in November 2022 to levy MVR 2 as tax on every plastic bag given by businesses at the time of sale. The amendment seeks to make plastic bags taxable from April 18.
The state's tax body, which levies taxes on bags from 12 noon on the same day, said in its 'Regulations to levy fees from plastic bags by those registered for GST', which states that a business that is mandatory to register for GST will also have to pay the same amount to MIRA on plastic bags sold or supplied without registering for GST.
The rules also state that even if goods are provided without GST, they will have to be taxed if they use plastic bags to make them.
The regulation further state:
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Failure to furnish fee information on plastic bags will attract a penalty of 0.5% of the fee to be paid during the fee collection period
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Fine not exceeding MVR 50 for every day without informing
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MIRA will be fined 0.05% of the non-payment amount for each non-payment day from the date of payment
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No tax will be levied on plastic bags used by the manufacturer to pack the goods to the level required for sale
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Businesses will have to pay taxes on plastic bags to MIRA in local currency
Circumstances under which plastic bags cannot be taxed under the Waste Management Act:
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Gags sold or supplied by duty-free shops
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Plastic bags used to pack all unpacked meat products
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The 'bin liner' that waste management service providers specifically sell or issue for waste collection
