Excise tax is only paid at the initial stage of the supply chain, therefore all business that deals with excise goods cannot claim for refund of tax.
Scenarios where refund for excise tax can be claimed:
- The excise tax paid on excisable goods which has been exported.
- Amounts paid to the Federal Tax Authority in error.
- The excise tax paid on excisable goods which have become a component of another excisable goods.
Excise tax has been paid on excise goods which have subsequently been incorporated to produce a new excise goods will become refundable tax; however, excise tax shall become due on the new excise goods when it is produced.
ABC Co. imports raw tobacco and paid excise tax of AED 2,000.
ABC Co. then uses tobacco for the production of cigarette and has paid excise tax of AED 4,000
Since ABC Co. has used tobacco which they have imported and paid excise tax on it
ABC Co. can claim for refund of (4,000-2000) AED 2,000.
However, if the ABC Co. imports raw tobacco and paid excise tax of AED 2,000 and this tobacco is used by XYZ Co. to produce cigarette (new excise goods) and has to pay AED 3,000. XYZ Co. cannot claim for refund.
* Amount used here is imaginary figures
In these scenarios, a business registered for excise tax can get the refund of the excise tax paid. The refunded amount will be deducted from the tax due in the next excise tax return period.
Excise tax services in UAE.
Al Wahat Accounts & Audit services is one of the leading tax consultants in UAE. Our expert team understand the excise tax regulations and can help you get your refund and also prevent getting penalties from FTA.
Contact us for further information email@example.com