VAT Guide to Value Added Tax - sri lanka inland revenue ...

Chapter- 20
Diplomatic Missions & VAT
20.1 (a) Diplomatic Missions and Organizations to which Diplomatic Privileges Act No. 9
of 1996 applies, and
(b) Diplomatic Personnel of such missions or organizations are exempt from VAT
on the following supplies :-
• On the import of goods (including import under a temporary admission carnet for
re-export) and
• On the supply of goods and services obtained by them in Sri Lanka.
The exemption in the case of Diplomatic Personnel is subject to the following
conditions:-
i. Reciprocal benefits should be available to their counter parts from Sri Lanka and
ii. Goods and Services to which such reciprocal benefits are available must be
identified as such by the C.G.I.R
• Thus if any goods or services used by the Diplomatic personnel of the Sri Lankan
Mission in any other country is exempt from VAT (or corresponding sales tax) in
that country then the Diplomatic Personnel of the Mission of that country in Sri
Lanka too will be exempted from VAT in Sri Lanka in respect of such goods
and services. The exemption is based on the basis of reciprocity only.
• This is the only instance where persons (individuals and organizations) are
exempted from payment of VAT. The exemption is applicable to payment of
VAT and not for charging and collecting VAT if they undertake to carry on taxable
activities/businesses.
20.2 Following goods and services have been identified by the C.G.I.R for the purpose
of exemption as being commonly exempted in all the countries.
Goods
• Any goods purchased locally or imported or supply of goods from Customs
Bonded warehouses and duty free shops with the approval of the Ministry of
Foreign Affairs.
Services
• Telecom Services including internet
• Electricity Services
• Services provided by star class hotels
• Buildings on rent/lease
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