Excise Duty

The Excise Duty Act, 2014 (Act 878) as amended, imposes excise duty on the goods specified in the first schedule where the goods are manufactured in the country or imported into the country. However, footnote 1 (b) of the first schedule to the Excise Duty Act, 2014 (Act 878) restricted the payment of excise duty on plastic and plastic products listed under Chapters 39 and 63 of the Harmonised System and Custom Tariff Schedules, 2012 to the point of entry. Footnote 1(b) states "The excise duty indicated in the third column in relation to the goods listed under Commodity Description for Tariff No.7 shall be paid at the point of entry". The Excise Duty (Amendment) (No.2) Act, 2023 (Act 1108), however, removed this footnote to the first schedule. The removal of this footnote implies that plastic and plastic products listed under Chapters 39 and 63 of the Harmonised System and Custom Tariff Schedules, 2012 attract excise duty at the applicable rate whether they are locally manufactured or imported into the country. Act 1108 reduced the excise duty rate on plastic and plastic products listed under Chapters 39 and 63 of the Harmonised System and Custom Tariff Schedules, 2012 from ten per centum (10%) to five per centum (5%) of the ex-factory price. The Commissioner-General (CG), in accordance with Section 1(2) of the Revenue Administration Act, 2016 (Act 915), has developed the following guidelines for the implementation of excise duty on locally manufactured plastic and plastic products listed under Chapters 39 and 63 of the Harmonised System and Custom Tariff Schedules, 2012 as per Excise Duty (Amendment) (No.2) Act, 2023 (Act 1108).

TARIFF No. TARIFF DESCRIPTION OLD RATE NEW RATE 8. Plastic and Plastic products listed 10 per centum of 5 per centum of the under Chapters 39 and 63 of the the ex-factory price ex-factory price Harmonised System and Custom Tariff Schedules, 2012 The amendment extended excise duty to cover locally manufactured plastic and plastic products listed under Chapters 39 and 63 of the Harmonised System and Custom Tariff Schedules, 2012. Also, excise duty on imported and locally manufactured plastic and plastic products listed under Chapters 39 and 63 of the Harmonised System and Custom Tariff Schedules, 2012 has been reviewed downward to 5% of the ex-factory price.

Despite the restricted nature of excises, there are exemptions provided under section 2 of the Excise Duty Act, 2014 (Act 878). Second Schedule (Exempt goods) Tariff Rate of No. Commodity Description Duty 0% 2.1 The President of the Republic of Ghana: all goods purchased from a manufacturer for the use of the President of Ghana 2.2 Government of Ghana contracts where the contract is duly approved 0% All goods purchased from a manufacturer by a person under contract to the government where such exemption from excise duty forms part of the terms of the contract.

2.3 Licensed manufacturers: All goods purchased by a manufacturer licensed under the Excise Act 0% for the purpose of manufacturing excisable goods 2.4 Diplomatic Missions

1. (a) All goods purchased for the official use of any Commonwealth or 0% Foreign Embassy, Mission or Consulate
2. (b) All goods purchased for the official use of permanent member of a 0% Diplomatic Service of any Commonwealth or foreign country, exempted by the minister responsible for foreign affairs. Where with reference to (a) and (b) above a similar privilege is accorded by the Commonwealth or Foreign country to the Ghana representative in that country
3. C) All goods purchased by personnel engaged by an International 0% Agency or in a Technical Assistance Scheme where the terms of the agreement made with the Government of Ghana include exemption from excise duty and duly approved by Parliament 2.5 Non-domestic goods 0% All goods re-exported

Section 2(b) of Act 878 provides for the following exemptions;

1. (a) goods specified in the second schedule;
2. (b) goods that have not been entered for home use from the warehouse of a manufacturer where the Commissioner-General is satisfied that the goods
3. (i) have been destroyed by natural causes; or (i)have deteriorated or been damaged while stored in the warehouse of a manufacturer and have been securely disposed of to the satisfaction of the Commissioner-General;
4. (c) goods that are exported if the goods are;
5. (i) entered for re-export or re-exported in the case of imported goods
6. (ii) removed from a warehouse and immediately entered for export in the case of locally produced goods;

:

1. (i) delivered as ship stores on a ship or aircraft proceeding to a place outside Ghana
2. (d) goods that are removed from a warehouse of a registered manufacturer to another warehouse of the same manufacturer or to the warehouse of another registered manufacturer.

1. A) A person shall not carry on a business of manufacturing excisable goods in the country unless:
2. i) that person is registered under the Excise Duty Act, 2014 (Act 878)
3. i) the excisable goods are manufactured in a warehouse; and
4. iii) that person has entered into a general bond or lodged a form of security with the Commissioner-General.
5. B) A person who intends to carry on a business of manufacturing excisable goods in the country shall, not later than thirty days before commencement of the business, apply to the Commissioner-General to be registered under the Excise Duty Act, 2014 (Act 878)
6. C) Any person who causes to be made for them plastic products, for sale to the public or to be used in the manufacture of other products, whether or not these other products are excisable would be registered. Also, any person who manufactures plastic products, for sale to the public or to be used in the manufacture of other products by the same manufacturer or other person, whether or not these other products are excisable would also be registered (captive consumption).

The person who is caused to manufacture plastic products, whether or not they sell plastic products would be registered.

For the purposes of establishing:

1. a) the amount of credit due for the purchase of excisable raw materials; and
2. b) the amount of excise duty to be refunded where applicable for purchases made in accordance with section 11 of the Excise Duty Act, 2014 (Act 878) as amended, the Commissioner-General may require an importer of excisable raw materials who is not a registered manufacturer to be registered with the Authority. Stockists will be subject to registration requirements above in line with Regulation 11 of the Excise Duty Regulation, 2016 (L.I 2242). Regulation 12(2) requires stockists to also file returns on the purchases, sale and disposal of the goods to the Commissioner-General not later than the twenty-first day of the following calendar month.

The Commissioner-General shall issue a certificate to manufacture excisable goods on the payment of the required fee determined in accordance with the Fees and Charges (Miscellaneous Provisions) Act, 2009 (Act 793).

(4) A certificate to manufacture excisable goods shall expire one year after the date of issue and shall be renewed on the payment of the required fee determined in accordance with the Fees and Charges (Miscellaneous Provisions) Act, 2009 (Act 793).

A manufacturer shall apply to the Commissioner-General in a form determined by the Commissioner-General for approval of premises as a warehouse for the purpose of depositing, keeping, manufacturing, or securing excisable goods.

The Commissioner-General may accept security for an obligation under a tax law on the terms and conditions specified by the Commissioner-General. The security referred to may take the following forms:

1. (a) bank deposit or banker's draft;
2. (b) cash deposit or the equivalent of a cash deposit;
3. (c) bond or guarantee;
4. (d) undertaking by an authorised economic operator;
5. (e) charge, lien, mortgage or other fixed interest over property; or
6. (f) a combination of paragraph (a) to (e).

:

1. A) A manufacturer shall file an excise duty return for each calendar month not later than twenty- first day of the following calendar month whether or not an excise duty is payable for the month to which the return relates as required by the relevant laws and regulation. The returns to be submitted by manufacturers for the month are:
2. a) the raw materials and other packaging materials stock return; and
3. b) returns for production activities

Where excise duty is payable by a manufacturer

1. (a) in relation to excisable goods entered for home use from a warehouse by the manufacturer during a calendar month, the excise duty shall be paid to the Commissioner-General on or before the twenty-first day of the following calendar month; and
2. (b) in relation to excisable goods manufactured in an unapproved warehouse, the excise duty shall be paid to the Commissioner-General when the goods are manufactured

A manufacturer who uses excisable goods on which excise duty has been duly paid as raw materials in the manufacture of other excisable goods in the country, is subject to the production of evidence of payment of excise duty, entitled to a credit for (a) the excise duty paid by the manufacturer in respect of an entry of the raw materials for home use, or

(b) an excise duty that the Commissioner-General is satisfied was paid, by the person from whom the registered manufacturer acquired the raw materials or by any other person, in respect of an entry for home use of those raw materials.

1. A) Section 11(4) provides that where an excess credit is attributable to excisable goods manufactured for exports, the manufacturer is entitled to a refund of the amount, having met all the requirements provided for in Section 11(4), Sections 12 and 13 of Act 878. Where an excess credit is attributable to excisable goods manufactured for export, the manufacturer is entitled to the refund of that amount if:
2. (a) more than twenty-five percent of the excisable goods entered by the manufacturer in that calendar month were entered for export; and
3. (b) the export proceeds have been repatriated by the bank of the buyer to the authorised dealer bank of the exporter in the country.
4. B) Where a refund is payable to a person, the Commissioner-General may apply part or all of the refund
5. a) firstly, in reduction of an excise duty, interest or penalty payable by the person under this Act; and
6. b) subsequently, against any other taxes or duties that may be collected by the Commissioner-General

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The Excise Duty (Amendment) (No.2), 2023 (Act 1108) applies to plastic and plastic goods imported into or manufactured in the country only if;

1. a) the goods are imported or manufactured on or after the commencement date of this amendment; or
2. b) the goods were imported or manufactured before the commencement date but are entered for home use on or after the commencement date. Manufacturers who are required to be registered under the Excise Duty Act as amended, to manufacture plastic and plastic products only from an approved warehouse, shall from the commencement date comply with the provisions of the Act. From the commencement date, a manufacturer of plastic and plastic products who is not registered under the Excise Duty Act shall comply with the Act as if the person were registered and the premises on which the manufacturer produces the product shall be considered to be an approved warehouse.

Manufacturers of plastic and plastic products shall be required to submit to the Authority a list of the raw materials they have in stock at the beginning of the implementation period. This would aid in the reconciliation of the amounts of credit that would be claimed.

A person who carries on a business of manufacturing excisable goods in the country without registering as a manufacturer commits an offence and is liable on summary conviction to excise

duty payable in relation to the excisable goods or to a term of imprisonment of not more than one year or to both. In addition to the penalty provided above: (a) the person shall pay a penalty of not more than two times the amount of excise duty payable in relation to the excisable goods; or an amount of not less than five hundred currency points and not more than one thousand currency points, whichever is higher; and (b) Commissioner-General may authorise the forfeiture of goods, raw materials, apparatus, utensils and other materials which in the opinion of the Commissioner-General can be used in the manufacture of excisable goods.

'Ex-factory price', in relation to goods, means the sum of

1. (a) all cost to manufacture those goods, and
2. (b) all profits that a manufacturer takes or expected to take in relation to goods when they are sold in comparable circumstances between unrelated parties in the open market, as is considered appropriate by the Commissioner-General.

Illustration 1

Illustration 2

ABC Ltd manufactured plastic basins using imported granules. In September 2024, ABC imported 100 bags of granules to be used for the manufacturing of its products. Each bag contained 25 kg of the granules and they paid an import excise duty of GHS20 per bag. ABC produced and delivered 200 pieces of the plastic basins using all the granules imported. The ex- factory price per piece of the plastic basin was GHS 500 and excise duty charged at a rate of 5 per centum of ex-factory price. To obtain the excise duty payable

Solution

Quantity of granules imported: 100 bags Quantity of granules issued to production: 100 bags Quantity of plastic basins produced and delivered: 200 pieces Ex-factory price per piece: GHS 500 Total import excise duty paid for the 100 bags: GHS 2,000 (GHS 20 x 100 bags) Duty payable: Steps

1. 1) Determine the output excise duty payable for the quantity of wash basins delivered
2. 2) Deduct the import excise duty paid as indicated on the Commissioner-General's invoice or the Customs Declaration
3. 3) The net payment becomes the Excise Duty payable for the month. GHS Output excise duty: (200 pieces x GHS500) × 5% 5,000 Import excise duty paid: (100 bags x GHS20) 12,000) Net Duty Payable 3,000

Illustration 3

ABC Ltd manufactures plastic basins using imported granules. In November 2024, ABC imported 100 bags of granules. Each bag contained 25 kg of the granules and they paid an import excise duty of GHS 30 per bag. ABC produced and delivered 100 pieces of the plastic basins using 50 bags of the granules imported. The ex-factory price per piece for the plastic basin was GHS 500 and excise duty charged at a rate of 5 per centum of ex-factory price. To obtain the excess credit to be carried forward by ABC

Solution

Quantity of granules imported: 100 bags Quantity of granules issued to production: 50 bags Quantity of plastic basins produced and delivered: 100 pieces Ex-factory price per piece: GHS500 Total Import excise paid for the 100 bags: GHS 3,000 (GHS30 x 100 bags) GHS Excise duty base value: (100 pieces x GHS500) 50,000 Output excise duty payable: (GHS50,000) x 5% 2,500 Import Excise duty paid: (100 bags x GHS 20) (3,000) Net Credit (500) The excess credit arose because the output excise duty was less than the upfront excise duty paid at the point of entry.

determination of duty payable Illustration 4 ABC Ltd, based in Tema, specialises in the production of plastic basins. In December 2023, the company imported 100 bags of granules. Between December 2023 and February 2024, 50 bags were used to manufacture 200 basins, of which 150 were delivered to customers. Effective 1st March 2024, excise duty was introduced on locally manufactured plastic products. As of that date, ABC Ltd had 50 bags of granules in stock. During March 2024, the company utilised the remaining 50 bags to produce an additional 200 basins and delivered 220 units in total.

The basins were sold at an ex-factory price of GHS 500 per unit. Excise duty was applied at a rate of 5% on this price. The import excise duty paid at the rate of 5% of the excise value amounted to GHS 2,000. To determine the excise duty payable for March 2024 Solution: Quantity of granules imported (December 2023): 100 bags Quantity of granules issued to production (December 2023 - February 2024): 50 bags Quantity of plastic basins produced (December 2023 - February 2024): 200 pieces Quantity of plastic basins delivered (December 2023 - February 2024): 150 pieces Opening stock of granules (1st March, 2024): 50 bags Quantity of granules issued to production (March 2024): 50 bags Opening stock of plastic basins (1st March, 2024): 50 pieces Quantity of plastic basins produced (March 2024): 200 pieces Quantity of plastic basins delivered (March 2024): 220 pieces Ex-factory price per piece: GHS 500 Total import excise duty paid for the 100 bags @ 5%: GHS 2,000 Total import excise duty paid on opening stock of granules (1st March, 2024) 50 bags (GHS 2,000 ÷ 100 bags) x 50 bags : GHS 1,000 Duty payable: Steps 1) Determine the output excise duty payable for the quantity of wash basins delivered 2) Deduct the import excise duty paid as indicated on the Commissioner-General's invoice or the Customs Declaration The net payment becomes the Excise Duty payable for the month. GHS Output excise duty (March 2024): (220 pieces × GHS500) × 5% 5,500 Import excise duty paid on Opening stock of granules on 1st March, 2024 (i.e; 50 bags of granules: (1,000) Net Duty Payable (March 2024) 4,500

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• AUTH CHANA -RE

APPLICATION FOR EXCISE REGISTRATION NAME OF APPLICANT:... TRADING NAME (if sole proprietorship):.. TAXPAYER IDENTIFICATION NUMBER (TIN): .. LOCATION: ... PHONE NUMBER: ..... ......FAX NUMBER:.. ADDRESS (mailing) : .... (E-mail): .. .(Digital address) - PLEASE PROVIDE INFORMATION ON THE FOLLOWING: NAMES, ADDRESSES AND QUALIFICATIONS OF DIRECTORS її. COPIES OF ARTICLES OF ASSOCIATION AND CERTIFICATES OF COMPANY REGISTRATION ill. EVIDENCE OF ABILITY TO MAINTAIN PROPER ACCOUNTS AND RECORDS NAME OF CONTACT PERSON: .... DESIGNATION/POSITION OF CONTACT PERSON: .... PHONE NUMBER OF CONTACT PERSON: ... EMAIL ADDRESS OF CONTACT PERSON: ..... Manufacturer/Warehouse Requirement i. Evidence of Title Deed or Lease to Warehouse ii. Description/plan of the Warehouse ill. Written Consent from Landlord if Rented IV. Plan Location and Physical details of the area to be designated as the warehouse such as size, materials of construction.

Warehouse Registration Form V. Details of external security of the warehouse such as fences and internal security such as entries, exits, alarms and lights. Vi. Nature of the goods to be manufactured or stored in the warehouse; Vil. The estimated value of the goods likely to be stored in the warehouse, and the estimated excise duty liability of the manufacturer in respect of subsequent removal of those goods from the warehouse Vili. The expected method of disposal of the goods; viz - Local sales - Export sales - Use in the manufacture of other excisable goods - Or other means of disposal Including an estimate of the anticipated percentage of each type of disposal Manufacturing Process Statement of manufacturing process for each product ii. List of plant and machinery iii. List of raw materials for each product IV. Statement of the composition of each product DECLARATION: ....... Declare that the information provided in this application is complete and correct. Signature: .... Date:........ Designation: ...

EX.3

DTRD EXCISE UNIT STOCKIST'S MONTHLY STOCK RECONCILIATION RETURN NAME:........................ TIN:.... MTH/YR.... BALANCE B/F ADD QTY CLEARED/PURCHASED TOTAL QTY AVAILABLE LESS QTY SOLD BAL C/D NAME: TIILE... SIGNATURE.. DATE..

STOCKIST MONTHLY RETURNS: EXCISE DUTY PAID ON GOODS IMPORTED/PURCHASED TAXPAYER NAME: TIN: TAX OFFICE... RETURN PERIOD:: ….. SR DATE OF IMPORT NATURE OF QTY VALUE OF EXCISE DUTY NO PURCHASE/IMPORT DECL/INVOICE PRODUCT IMPORTED/ GOODS PAID RECEIPT NO. (COMMODITY) PURCHASED PURCHASED/ (LTRS/PCS/KGS) IMPORTED

DECLARATION: SIGNATURE. DATE. NAME ...

STOCKIST MONTHLY RETURNS: SALE OF GOODS TAXPAYER NAME: TIN: TAX OFFICE: RETURN PERIOD: DATE INVOICE NAME OF TYPE OF EXCISE TIN QTY SOLD VALUE VAT&

NO. CUSTOMER BUSINESS LIC/NO LTRS/PCS/KGS (VAT/HIL/EXCL) NHIL GHẹ

SIGNATURE.... NAME ... TITLE:

STOCKIST MONTHLY RETURNS: EXPORT OF GOODS TAXPAYER NAME: TIN: TAX OFFICE: RETURN PERIOD: DATE INVOICE NAME OF TYPE OF EXCISE TIN QTY SOLD VALUE VAT& NO. CUSTOMER BUSINESS LIC/NO LTRS/PCS/KGS (VAT/NHIL/EXCL) NHIL

GHe

SIGNATURE.. DATE.... NAME ... TITLE: ..........

EXCISE DUTY RETURN CURRENCY IN GHS PRODUCTION ACTIVITIES FOR THE MONTH OF CURRENT TAX OFFICE LTO MTO STO (tick one) Name of Tax Office TAXPAYER NAME

TIN EXCISE LICENCE No Please refer to the completion notes overleaf for guidance in completing this Retur If Return for the period is "NIL" tick HERE then proceed to the DECLARATION

Ser ial Commodity Rate No of Product Unit of

Opening Type Stock Produced Quantity Quantity Closing Stock Er-

Delivered (6 + 7-8) Product Value Product Excise

Duty factory Delivered Excise Gross % unit Price Delivered for Value Duty Duty Excise Total (8xl0) Payable Payable - Duty Tax export (11x3) "See Notes" exports parable payable (12x3)

TOTAL LESS:

Upfront Excise Duty Payments

Exemptions - Reliefs Excise Duty

Exemptions - Exports Excise Duty

Total Excise Duty of UPFRONT PAYMENT / EXEMPTIONS (Sum up Boxes 17,18. 19)

Net Excise Duty Payable (Box15 minus Box 20)

(Overpayment) (Box 20 minus Box 15) DECLARATION I, hereby declare that the information provided above is true and correct. Name of Declarant POSITION SIGNATURE DATE Internal Use Only DT 0133 ver 1.2 Vetted By

ENUE:

DOMESTIC TAX REVENUE DIVISION EXCISE DUTY (RAW MATERIAL) STOCK RETURN CURRENCY IN GHS CURRENT TAX OFFICE LTO MTO STO (TICK ONE) (NAME OF GRA OFFICE) FOR THE PERIOD (MM/YYYY) NAME TIN EXCISE LICENCE NO TYPE OF RAW MATERIAL MEASURE UNIT OF OPENING

(lor or kg) STOCK ADDITIONAL STOCK DELIVERED QUANTITY CLOSING STOCK DECLARATION: I, Name of Deciaran hereby declare that the information provided above is true and correct. POSITION SIGNATURE DATE Internal Use Only Verred by DT 0132 ver 1.2