Section 29, The Goods and Services Tax Act, 2009

(1) Except as otherwise provided in this Act- (a) if all of the supplies made by a taxable person during a tax period are taxable supplies, the person is allowed input tax credits for all of the input tax paid or payable on taxable acquisitions or imports made by the person during that tax period; (b) if none of the supplies made by a taxable person during a tax period are taxable supplies, the person is not allowed input tax credits for the input tax payable on taxable acquisitions or imports made by the person during that period, unless with the written approval of the Commissioner-General the taxable person is deemed to be engaged in a seasonal or other business activity that by its nature results in supplies being made in a period later than the acquisitions; (c) if a taxable person makes both taxable supplies and non taxable supplies during a tax period, the input tax credits allowed to the person for that tax period shall be determined as follows:- (i) if an acquisition or import by the person relates wholly to the making of taxable supplies, an input tax credit is allowed for the full amount of input tax payable in respect of the acquisition or import; (ii) if an acquisition or import by the person relates wholly to the making of supplies that are not taxable supplies, no input tax credit is allowed for the input tax payable in respect of that acquisition or import; 48 49 Input tax credits. (iii) for acquisitions or imports by the person that relate, whether directly or indirectly, partly to making taxable supplies and partly to making other supplies, the sum of the input tax credits allowed for such supplies or imports during the tax period is calculated according to the following formula:– Where– A x B / C A is the total amount of input tax paid or payable in respect of imports or acquisitions made by the person during the period, less the input tax accounted for under subparagraphs (i) and (ii); B is the value of all taxable supplies made by the taxable person during the period; and C is the value of all supplies made by the taxable person during the period, other than supplies made through a taxable activity carried on by the person outside Sierra Leone. (2) Notwithstanding paragraph (b) of subsection (1)– (a) if the fraction B / C in subparagraph (iii) of paragraph (c) of subsection (1) is more than 0.95, except as provided otherwise, the taxable person is allowed input tax credits for all of the input tax payable on taxable acquisitions or imports made by the person during that tax period; (b) if the fraction B / C in subparagraph (iii) of paragraph (c) of subsection (1) is less than 0.05, the taxable person is not allowed input tax credits for taxable acquisitions or imports made by the person during that tax period; (c) if Regulations prescribe a different method for a specified group or groups of taxable persons, to calculate the amount of input tax allowed for a tax period in which the person makes both taxable and exempt supplies, the person shall use that method to calculate the input tax credits it is allowed for that period. (3) If subsection (3) of section 24 allows a taxable person to treat an amount as input tax in a tax period because a GST adjustment event occurred during that period in relation to an acquisition made by the person, the amount of the input tax credit the person is allowed as input tax credit is determined by reference to the extent that the person was entitled to an input tax credit for the original acquisition. (4) If subsection (4) of section 24 allows a taxable person to treat an amount as input tax in a tax period because a GST adjustment event occurred during that period in relation to a supply made by that person, the person is entitled to an input tax credit for that amount. (5) If, at the time the person submits a GST return for a tax period,the person does not, in relation to an acquisition or importation made in that tax period, hold the documentation referred to in subsection (6)– (a) the person is not allowed the input tax credit it would otherwise have been allowed for that acquisition or importation in that tax period; but (b) the person is allowed the input tax credit in the first subsequent tax period in which the person holds the documentation, and if the person does not hold the documentation before the end of the tax period ending 6 months after the date on which the return was due, no input tax credit is allowed for the acquisition or importation. 50 51 (6) The documentation required for the purposes of subsection (5) is– (a) in the case of a taxable acquisition, the GST invoice issued by the supplier for the supply; (b) in the case of a taxable import, a cleared bill of entry or other document prescribed under the Customs Act for the import; or (c) in the case of an input tax credit allowed under subsection (3) of section 22 because of a GST adjustment event for an acquisition, the GST debit note issued by the supplier in respect of that event; and (d) in the case of an input tax credit allowed under subsection (3) of section 22 because of a GST adjustment event for a supply, a copy of the GST credit note issued to the recipient of the supply in respect of that event. (7) Subsection (5) does not alter the way in which the amount of an input tax credit for an acquisition or importation made in a tax period is calculated under this section. (8) Whether or not an acquisition or importation made in a tax period relates to making a particular kind of supply shall be determined on the basis of the taxable person’s intention at the time of the acquisition or importation; but the taxable person shall take account of the actual use or a change in intention that occurs before the date on which the GST return for that tax period is required to be lodged. (9) Where a person is registered after the coming into operation of this Act and makes an application in writing to the Commissioner-General within 6 months of being registered, the Commissioner-General may allow the person an input tax credit for taxable acquisitions or taxable imports made in the 3 months preceding the date of the registration if– (a) the person has the goods acquired or imported on hand at the date of the registration and has provided sufficient documentary evidence of this to the Commissioner-General; (b) the person provides in the opinion of the Commissioner-General, sufficient documentary evidence, including sales receipts and import documentation, to show the amount of GST that was included in the price of the acquisitions or that was paid by the person on importation; (c) the Commissioner-General is satisfied that the GST referred to in paragraph (b) has been accounted for by the supplier as required under this Act or paid to the National Revenue Authority at the time of import by the registrant; (d) the person has provided such other evidence as is necessary in the opinion of the Commissioner General, to establish the extent to which the goods acquired have been used in the registrant’s taxable activity prior to the date of the registration; and (e) the person would have been entitled to an input tax credit if the acquisition or importation had been made when the person was registered. 52 53 (10) Where an input tax credit is allowed under subsection (9)– (a) the amount of the input tax credit is reduced in proportion to the extent to which the thing acquired or imported was used by the registrant prior to the date of effect of the registration and to the extent that the person would not have been entitled to an input tax credit if the acquisition or importation had been made while the person was registered; (b) the person is not required to hold a GST invoice in relation to an acquisition for which a credit has been allowed. (11) Where a person makes an application under subsection (9)– (a) the Commissioner-General shall notify the applicant of his decision within 60 days of receiving the application, and shall state the amount (if any) of the input tax credit to which the person is entitled; and (b) the input tax credit (if any) will be allowed in the earlier of the tax period in which the person receives the notice or the tax period ending 6 months after the date of effect of the registration.