Based on the authority vested in me according to the provisions of Article (50) and in pursuance of the provisions of Articles (19) and (20) of the General Sales Tax Law No. (6) for the year 1994, as amended, the following Instructions are to be followed:

 

a)    Deduction of Tax:

 

First:     The Registered Person supplying taxable goods or services has the right to credit for the following:

a- The tax already charged on his returned sales, subject to the following conditions:

1. The amount of deduction should not exceed that which was already charged.

2. The tax should have been actually refunded to the purchaser or credited to his account in the books kept by the Registered Person.

3. In the event that the returned sales are taxable goods, they should have been actually received and the particulars thereof entered in the regular records of the Registered Person, namely, his accounting records and the valid warehouse system . 

 

b-   The general tax charged on his credit sales which came to be under the bad debts, subject to the following conditions:

1. The amount of deduction should not exceed the general tax which was accounted for.

2. The sales should be credit sales substantiated and documented by formal contracts or tax invoices which are subject to the satisfaction of the Director.

3. The amount of tax due on these sales should be established by him as bad debts. Debts shall be deemed to be bad debts in the following cases:

a- Demise of the purchaser of the taxable goods or services without leaving an estate which is sufficient to settle his debts in full or in part. 

b- Disappearance or travel of the purchaser of the taxable goods or services as well as the severance of his whereabouts for a period of two years from the date of his travel or the date on which the notice of his disappearance was served in case where no sufficient funds are available to settle his debt in whole or in part according to the provisions of this Law.

c- The supplier has had in vain exhausted all the legal procedures to enforce the debt, including the tax due thereof.

d- When the supplier has established that the purchaser has declared his bankruptcy.  

 

 

c-   The general tax already charged on his inputs of taxable goods and services while registered, subject to the following:

1. possession of tax invoices or import declarations in his name and the payment receipts pertaining thereto.

2. The goods and services be not listed under schedule (4) annexed to this Law.

 

d-   The pre-registration charged general tax on his inputs of taxable goods in his possession at the time of registration, subject to the following:       

1. Submission of a detailed inventory taking upon registration that shows the quantity of goods and the amount of tax which was already paid on taxable goods, together with the following documents:

a- A tax invoice issued in his name.

b- Customs import declarations and the corresponding payment receipts, both issued in his name .

2. In case where it is not possible to substantiate the amount of tax paid on such goods, the Registered Person may credit for a tax equivalent to 50% of the general tax rate by reference to the cost of taxable goods contained in the purchase invoices made by  none registered persons. 

           

e-   The special tax already charged on goods and services incorporated in the production of other goods and services subject to the special tax, subject to the following conditions:  

1. Possession of tax invoices and payment of the special tax due thereon. 

2. Maintaining of copies of the import declarations and the corresponding payment receipts of the imported goods on which the special tax had been already paid.

 

Second:  The Registered Person who makes supplies of taxable goods or services,

             together with those which are tax exempt – partial exemption status-, may credit for the following input tax against the amount of his output tax due on his supplies:

a-   The general tax already charged on inputs exclusively attributable to supplies subject to the general tax.

b-   The tax already charged on inputs attributable to exempt supplies or to non-business-use-supplies shall be excluded from deduction.

c-   In case where the same taxable inputs are attributable to both taxable and non-taxable supplies (whether exempted or non-business used), the portion of the deductible general input tax shall be determined according to the production formulae, and should this be not possible, it shall be calculated in proportion of the taxable supplies to the total supplies.  

           

Third:     Notwithstanding the provisions of the above paragraphs, the Registered Person who carries out a none taxable business and has already deducted a tax paid on his inputs relating to this business shall undertake to make out a debit note of the already deducted tax on his purchases of taxable goods and services and which he incorporated in the supply of none taxable business, and also shall undertake to pay  the tax according to his tax return to the Department within the fiscal year adopted by him, provided that this tax be calculated according to the production formulae. However, In case where this is not possible, it shall be calculated in proportion of the non-taxable supplies to the total supplies.

 

Fourth:     Apart from the deduction mentioned in paragraph (d) of part one above, the Registered Person  may not deduct the input tax paid more than three years earlier.

 

Fifth:       A person may not deduct the tax charged on goods or services entirely used before the date of registration. He may, however, deduct a portion of the tax paid on the goods and services partially used before the date of registration by reference to the consumption rate determined by the Director . 

 

b)  Refund of Tax:   

 

First:   a-  The tax already paid on the goods or services, or those incorporated in the production of other goods, which are exported, or dispatched to the free zones and duty free markets and to the special economic zone shall be refunded within a period not exceeding three months from the date of submitting a claim for refund to the Department in the following cases :

1.       The tax paid on goods re-exported or locally produced and exported in their original state .

2.       The tax already paid on goods and services incorporated in the production of other goods that have been exported .

3.       The tax already paid on goods and services incorporated in the performance of exported services, provided that they be considered as an integral part of the exported service .

 

b- To complete the refund procedures stated under part one above, the following conditions should be  fulfilled :

1.The locally purchased goods or services should have been purchased from a registered person by a tax invoice. As to the imported goods and services, they should have been duly cleared, the tax paid thereon and imported in the name of the same exporter, or the tax on the imported services has been paid to the Department by the payment receipt produced by the Department. As to the on imported service, tax should have been paid in accordance with Executive Instructions number (3) for the year 2003 in part two.

2.       The exportation shall be made according to Executive Instructions number (5) for the year 2003 concerning exportation .

3.       Tax shall not be refunded save of what has been paid by same amount and rate which have been in force at the time of clearance of the goods or time of payment for the imported services or at the time of purchasing the locally produced goods and services by reference to what has been actually exported.

4.Tax shall not be refunded save by reference to the production formulas of what has been already paid by same amount and rate which has been in force at the time of purchasing the goods, or their clearance, only by reference to what has been actually exported of goods which have been incorporated in the production of other exported goods.

5.       Tax paid on second hand goods shall not be refunded.

6.       Under no circumstances would the Department be prepared to consider a claim for refunding a tax that has been paid more than three years earlier.

 

 

c- The registered refund applicant shall enclose the following documents along with the refund application form :-

1.       A completed refund form number (6/A) approved by the Department and submitted by the concerned person or whoever is legally authorized .

2.       A tax return signed and certified by the Department, which shall be considered as a payment receipt of which the firm shall be held accountable.

 

 

d- The non-registered refund applicant shall enclose the following documents along with the refund application :-

1.       An completed refund form number (6/B) approved by the Department and submitted by the concerned person or whoever is legally authorized .

2.A copy of the supplier’s tax return signed and certified by the Department, which shall contain the relevant invoices numbers of the amounts claimed and which is to be attached later by the concerned directorate in the Department .

3.       A tax invoice of local goods and services (original copy). The Director, however, may, for acceptable reasons preventing the issuance of a authenticate invoice, accept a certified copy of the invoice, provided that the applicant undertake that he has never and will not ever claim the tax in question  when the original copy is found .

4.A copy of the import declaration in the name of the exporter himself(the first copy), provided that the original declaration be requested from the customs department together with all the relevant attachments.

5.       A copy of the export invoice which number is fixed on the import declaration .

6.       A production formula approved by the customs department or the General Sales Tax Department concerning the materials incorporated in the production of exported goods .

 

Second:  a- The following procedures shall be followed to refund the tax which was collected by mistake by the customs department in a pervious year :

1.       The applicant for refund shall submit a written application consistent with the form prepared by the Customs Department, showing the tax collected by mistake, along with the supporting documents needed .

2.The Customs Department shall check the refund request and the presented documents in order to determine the amount of the tax collected by mistake .

3.The Customs Department shall address the General Sales Tax Department, providing it with the original customs declaration, and determining the mistaken amount of tax to be refunded by the GST Department, given that the refund allocations for a previous year be included within the GST Department’s allocations.

4.       The GST Department shall check whether the applicant has already claimed back the tax in question by way of tax returns submitted to the Department. If so, the GST Department shall address back the Customs Department, notifying the situation with an apology for not refunding the amount requested by the applicant. If not, then the GST Department shall duly finalize the refund procedures. In both cases the declaration shall be sent back to the Customs Department except for the refund request which shall be kept in the GST Department. In case where the tax returns are not checked by the GST Department for the purposes of confirming of not claiming back the requested amount of tax, a warrant statement made by the applicant confirming of not claiming back the tax in question by way of tax returns may be accepted.

 

b- The following procedures shall be followed to refund the sales tax collected by mistake by the Customs Department in the current year:

1.       The applicant shall submit a written refund request according to the form prepared by the Customs Department, specifying the tax collected by mistake, along with the supporting documents needed .

2.The Customs Department shall undertake to check the refund request and the enclosed documents, and shall determine the tax collected by mistake.

3.       The Customs Department shall address the Ministry of Finance,  determining the amount of the mistaken tax to be refunded by the Ministry of Finance, given that the tax which has been paid during the current year shall be refunded from the revenues of same year.

4.The Ministry of Finance shall finalize the refund procedures, then send a copy of the settlement note together with a copy of the Customs Department’s letter of the refund transaction to the General Sales Tax Department to finalize its own procedures in accordance with the provisions of the General Sales Tax Law .

5.The registered taxable person who has his tax refunded by the Customs Department, shall inform the GST Department of the tax refunded to him in his return for the tax period following the date of the refund .

 

c- The applicant for refund shall enclose the following documents with the refund request form :

1.       A refund request submitted by the concerned party to the Customs Department .

2.       The Customs declaration and the pink copy of the payment receipt enclosed .

3.       A warranty submitted by the concerned party, stating that the applicant has not claimed back the requested amount in question in his tax returns .

 

Third:   The Tax mistakenly charged by a registered person on the locally produced goods or supplied services shall be refunded as follows:

1.    The refund applicant or who is legally authorized shall formally apply to the supplier for refund, specifying the amount of tax paid by mistake, and attaching the supporting documents .

2.    The supplier shall refund the tax collected by mistake from the purchaser either by crediting his account as accounts payable or by issuing a cash credit note.

3.    The supplier shall debit his taxable supplies by the same amount of tax collected by mistake. The debited supplies shall be recorded in the books as retuned taxable supplies, and accounted for as exempt supplies, provided that he produce a debit note to the Department by the amount of the non deductible tax which has already been credited in relation to exempt supplies.

 

Fourth:  The tax mistakenly charged on the locally produced goods or supplied services by a non-registered or deregistered person shall be refunded as follows:

1.    The applicant for refund or who is legally authorized shall formally apply to the Department for refund, specifying the amount of tax paid by mistake, and attaching the supporting documents.

2.    The Department shall refund the tax collected by mistake from the purchaser by a cash payment voucher .

3.    The tax collected by mistake and belonging to previous financial years shall be refunded by the Department. The tax collected in the current financial year shall be refunded by the Ministry of Finance .

 

Fifth:    The general tax paid on inputs which are deductible under Article (19) of the GST Law and was paid at least six months earlier, but has not yet been deducted from the general tax due to the Department during that period, shall be refunded subject to the following:

1.    The registered person shall have filed all his tax returns .

2.    The goods and services related to the credit to be refunded are still in the possession of the registered person .

3.    The goods or services shall not have been used by the purchaser .

4.    In case where the goods and services mentioned in sub-paragraph (3) above have been used for exporting or supplying zero-rated goods, and the registered person has not claimed a refund of any relevant amount in his tax returns, then the mentioned goods and services shall be treated similarly as goods in the possession of the registered person, and tax on which shall be refunded if other conditions are met. The Department, however, shall make the necessary checking to establish that no refund claims have been made in his previous tax returns .

5.    In case where there is a credit carried forward and resulted from a value lost, the credit to be refunded in such case is only that which was paid at least six  months earlier.

 

Sixth:      Tax shall be refunded to the Non - residents persons as follow :-

a-     These procedures shall be applied to the tax paid on the goods which are in the possession of non-resident persons upon their departure, provided that the amount of the tax to be refunded be not less than fifty dinars and not exceeding five hundred dinars. In case where the tax is more than five hundred dinars, the procedures stated under part one above shall be followed.

b-     The non - resident person is either a Jordanian or a foreign person whose period of residence in the kingdom should not exceed one hundred and eighty days during the twelfth months preceding the date of his departure.

c-     The procedures and the refund scheme adopted by the Department, whether carried out by the Department itself, or in coordination with the Customs Department, or with any legal person approved by the Cabinet, shall be taken into consideration, provided that it includes the following:-

1.       The party authorized to make the refund shall complete the tax refund request form of passengers, prepared for this purpose by the Department, which shall be of three copies with a serial number. The first copy is to be handed to the purchaser along with the tax invoice duly produced by the registered supplier, after stamping the form with his special seal and affixing the tax number. The second copy is to be kept by the concerned party. The supplier shall keep the third copy for the purpose of post audit.

2.       The party authorized to make the refund shall assume all the costs pertaining to the refund process, including the print out of the assigned forms and the circulation to those who are concerned. It shall also be held responsible for any errors resulting from refunding the tax in violation to the instructions .

3.       The customs officer at the exit center shall check the information read in the form against the enclosed documents and the goods to be exited and certify it with the phrase “ Seen upon leaving “ after confirming that it has been taken among the possessions of the passenger upon leaving .

4.       If the tax amount of the exported goods which are in the possession of the passengers, is more than five hundred dinars, then the procedures stated under part one above shall be followed .

5.       The passenger shall assume any costs pertaining to the refund process .

 

Seventh:  The special or general tax, as the case may be,  paid on the goods supplied to

               any of the bodies exempted under Articles (21) and (22) of this law, shall be refunded as follows :-

1.    The applicant shall apply in writing to the Department for refund of tax, showing therein the amount of the tax paid .

2.    Produce all supporting documents for this request .

3.    Produce the tax invoice of the locally purchased goods .

4.    Produce a customs declaration duly certified by the Customs Department .

5.    Produce the  pink copy of the tax payment receipt.

 

Eighth:     Instructions No. (4) for the year 2001 concerning tax deduction and refund shall be repealed. 

 

Ninth:   These Instructions shall be put into operation as of the date of publication thereof in the Official Gazette.

 

Minister of Finance