Plastic bag fee is a fee charged under the Waste Management Act by businesses operated in the Maldives, on plastic bags sold or provided free of charge to customers at the point of sale.
Plastic bag fee must be charged from 00:00 hours of 18 April 2023 onwards.
Plastic Bag Fee collected by GST registered businesses must be paid to MIRA.
Even though a person is not registered for GST, if he is required to be registered for GST, then he must pay to MIRA the amount of plastic bag fee collected by him.
There is no requirement to register for plastic bag fee with MIRA. However, GST registered persons and persons who are required to be registered for GST must pay the amount of plastic bag fee collected by them to MIRA.
Plastic bags subject to the plastic bag fee are bags made of plastic which are used for carrying goods.
Plastic bags used for carrying goods which are made from degradable (self-decomposing) plastic are subject to plastic bag fee.
Also, plastic bags which are used by the manufacturer of a good for the packaging necessary for the sales of such goods are not subject to plastic bag fee.
Plastic bag fee is charged at the rate of MVR 2 per plastic bag sold or provided free of charge at the point of sale.
The tax point of plastic bag fee determines the taxable period in which the GST registered person must account for the plastic bag fee collected by him in the GST return, and the deadline for the payment of the amount of plastic bag fee to MIRA.
When a plastic bag is sold, GST must be charged from that transaction, and MVR 2 must be charged as plastic bag fee on top of the GST inclusive price of the bag. In this case, the tax point of the plastic bag fee is the GST time of supply of the transaction. In other words, the plastic bag fee information of the sold plastic bag must be included in the GST return in which the person is required to declare the GST charged for the sold plastic bag.
Plastic bag fee must be charged at MVR 2 even when a plastic bag is provided free of charge in the supply of a good or goods. In this case, the tax point of plastic bag fee is the GST time of supply of the goods sold. In other words, the plastic bag fee information of the plastic bag provided free of charge must be included in the GST return in which the person is required to declare the GST charged for the goods sold in the transaction.
Plastic bag fee must be charged on plastic bags sold or provided free of charge in supplying GST exempt goods or zero-rated goods.
The tax point of plastic bag fee for plastic bags sold or provided free of charge in supplying goods which are not subject to GST, is the GST time of supply of those goods had it been a GST taxable supply.
It is the responsibility of the person operating the business activity to charge plastic bag fee from their customers.
GST should not be charged on the amount of plastic bag fee.
Whether a plastic bag bundle is sold or provided free of charge, plastic bag fee must be charged at the rate of MVR 2 for each plastic bag in the bundle. Additionaly, if the seller is a GST registered person, he must also charge GST on plastic bag bundle sold.
The amount of plastic bag fee collected should not be included in computing the total turnover for the purpose of determining whether or not a person meets the GST registration threshold.
Plastic bag fee charged by persons not registered for GST is income for that person. However, plastic bag fee charged by GST registered persons will not be treated as an income.
GST registered persons are required to include in their GST returns the information of plastic bag fee collected. Persons not registered for GST are not required to submit information of plastic bag fee collected by them to MIRA.
Any changes to the information of plastic bag fee included in the GST return must be brought by amending the respective GST return in which the information was declared. No changes can be made to any of the information of plastic bag fee declared in a GST return once the time frame to amend the GST return expires.
Plastic bag fee must be charged in Maldivian Rufiyaa only.
The amount of plastic bag fee collected must be included in the GST return in Maldivian Rufiyaa, and the amount must be paid to MIRA in Maldivian Rufiyaa.
Persons operating in the tourism sector also must declare the amount of plastic bag fee collected in their GST return in Maldivian Rufiyaa, and the amount must be paid to MIRA in Maldivian Rufiyaa.
Plastic bag fee must not be charged from a bag that is not subject to plastic bag fee, nor should it be charged in excess of the determined rate. Where an amount is charged in excess as such or charged on a bag that is not subject to the fee, the amount must be refunded to the customer. If the amount is not refunded to the customer by the deadline for submission of the GST return for the period in which the amount was charged, the amount must be included in the GST return of the respective taxable period and paid to MIRA. The amount must also be refunded to the customer whether or not it has been paid to MIRA.
Documents and records must be maintained to the extent that such documents are sufficient to ascertain that the amount of plastic bag fee collected from customers is in accordance with the Acts and regulations. Documents and records that should be maintained includes the following:
For any reason, if a customer returns a plastic bag after use, the plastic bag fee pertaining to that plastic bag need not be refunded to the customer. The amount must however be paid to MIRA.
The tax invoice or receipt issued to the customer must clearly and distinctively state the amount of the plastic bag fee charged to the customer. However, business must be mindful to not include the amount of plastic bag fee when calculating GST.
“Juice petty bags” are not bags that are used to carry goods, and thus plastic bag fee must not be charged from juice petty bags.
“Ziplock bags” are not bags that are used to carry goods, and thus plastic bag fee must not be charged from ziplock bags.
Plastic bags used by the manufacturer of goods as packaging necessary for the sale of such goods are not subject to plastic bag fee.
Plastic bags sold or given free of charge to carry unpackaged and fresh deep sea fish, reef fish, bait fish, fish used as bait, seafood and parts of these fish are exempt from plastic bag fee.
Frozen fish is not included in the definition of “fish”, and therefore, plastic bag fee must be charged from plastic bags sold or given free of charge to carry frozen fish.
Fish kept chilled to maintain its freshness will be considered fresh fish. Plastic bags sold or given free of charge to carry such chilled fish are exempt from plastic bag fee.
If at the point of sale the “pet fish” bought by a person is put in a plastic bag, then plastic bag fee must be charged for that plastic bag.
Plastic bag fee should not be charged for the plastic bag used to package chicken meat. However, if packaged chicken meat is put in a plastic bag and sold, then plastic bag fee must be charged from the plastic bag used to put in the chicken meat.
When unpackaged chicken meat is sold in a plastic bag, plastic bag fee must be charged for that plastic bag.
In promotional events held by businesses, if the event involves buying and selling of goods, then plastic bag fee must be charged from the plastic bags sold or given free of charge in the event.
“Bin liners” sold or given free of charge specifically for waste disposal, by either a person who provides waste management services or another relevant authority is exempt from plastic bag fee.
Plastic bags used by the manufacturer of goods for the packaging necessary for the sales of such goods are not subject to plastic bag fee.
Plastic bag fee must be charged from plastic bags provided to put in complementary goods or goods supplied for free.
Plastic bag fee must be charged from the plastic bags in which take-aways and deliveries are provided by restaurants/cafés.
Plastic bag fee must be charged from the plastic bags in which rice, flour and sugar are sold to customers.
Plastic bags used by the manufacturer of rice, flour and sugar for the packaging necessary for the sales of rice, flour and sugar will not be not subject to plastic bag fee. If rice, flour and sugar is packed in a plastic bag by anyone other than the manufacturer, then such plastic bags are subject to plastic bag fee.