What are the transitional provisions for contracts that have been signed with entities other than the Government, before the implementation of VAT?

Supplies mentioned in contracts that have been signed with entities other than the Government are taxed at the standard rate of VAT from 1st of January, 2019. If the contract states that the amount to be paid is exclusive of tax, then the supplier may go ahead and collect VAT. If the contract does not state anything related to VAT, then the supplier can either collect VAT if the other party is registered, or consider the amount mentioned in the contract to be inclusive of tax.

The following formula can be used to calculate the amount of VAT to be paid for a tax-inclusive supply, when it is subject to 5% VAT: Amount of VAT (5%) = Total amount to be paid for the supply/21