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

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• None of the companies covered by this scheme should engaged in exempt/excluded supplies. • Adjustments on fringe benefits, self supplies etc. in relation to such services should be made by the individual Companies not withstanding that they do not claim input tax. • Any GST/VAT payment due from participating companies should be made without considering the input tax situation of the central company. • The company should consider the full amount of input. Companies should not make any adjustments for income tax purposes. 24.5 Exemption of Educational Services • Supply of educational services are exempted if they are provided by (i) an educational establishment (ii) government schools or (iii) schools funded by the government. • An educational establishment means a higher educational institution established under the Universities Act or the Buddhist and Pali Universities Act or any recognized institution providing vocational training or re-training or an incorporated examination body. For this purpose i. “Recognized Institutions’ means any government department, any Provincial Council, any Local Government Authority and any board or body which has been established by or under any law other than Companies Act No.17 of 1982 with capital wholly or partly provided by way of a grant or loan from the Government. ii. iii. “A school funded by the Government” means any school in receipt of funds from the government to meet the salary bill. Educational Services do not include – sale of goods from school shops, sale of school uniforms, and sports clothing etc., receipt of commission for allowing sales by outside organizations, conducting carnivals, exhibitions or fairs etc., renting premises and other fund raising activities. 24.6 Exclusion of local buying and selling By virtue of Section 3 if a supplier of goods is unable to satisfy the C.G.I.R as to the source from where the goods supplied by him were acquired then such supplies will not be treated as local buying and selling of goods and will be subject to VAT. In order to satisfy the C.G.I.R. evidence in the form of following records are required. 126
i. A record of local purchases of goods (whether for cash or on credit) which should contain the following details. (a) Date of transaction (b) Name and address (including business name) of the person from whom the goods were acquired. (c) Type of goods and quantity/capacity (d) Whether imported goods or local goods? (e) Consideration paid and nature of payment(Cash cheque etc.). (f) If GST/VAT has been paid on purchases, the amount paid. ii. Chronologically arranged receipts and tax invoices in respect of such purchases. 24.7 Issues relating to insurance • Primary Insurance - Collection of premia (other than pure life insurance) is liable to GST/VAT. When the life insurance is combined with other insurance like medical/health it has to be apportioned. • Re-insurance – Local - This is a part of an insurance business and therefore GST/VAT has to be charged on the premia other than on life insurance. • Re-insurance – Foreign - The insurance companies who pay re-insurance premia to companies outside Sri Lanka need not pay GST/VAT on such insurance premia because the supply and consumption of service take place outside Sri Lanka. • Insurance Claims - If the repair should take place in an assigned garage, and if the garage is a registered person, the garage should charge GST/VAT and issue a tax-invoice to the insurance company. The garage should declare that amount as output tax. Insurance company can claim it as input credit (Owner is not involved) - If the owner has to repair the vehicle on his own and submit bills to the Insurance Company: - In such cases the insurance company has no contract with the garage. The garage owner, if registered, should charge VAT and issue a taxinvoice in respect of repair charges. The insurance company should pay VAT only on such invoice and not on any other invoices that may be produced by the owner of the vehicle in respect of spare parts which he may have purchased for the purpose of such repair. There should be only one invoice form the garage and the value of supply may include the value of spare parts supplied by the owner. The insurance company is not obliged to reimburse VAT to the owner in respect of spare parts 127
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But for the best to the September 0
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Preface The Value Added Tax Act was
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Chapter - 1 Introduction 1.1 Purpos
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However from the point of view of t
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The following test which has been a
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iv. Import of any fabric, yarn, gre
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Chapter - 3 The definitions of conc
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Eg. 1 : If “A” wants to termina
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c. Time of supply in relation to su
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Thus, any trade, business, etc. are
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a business in Sri Lanka and not to
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When the recipient is not a registe
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• There are two types of registra
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(ii) continued without making an ap
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(d) (e) (f) input credit has been c
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4.13 Activity Code Number “Suppli
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the H.S. classification it may be b
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5.8 Payment of tax on Assessments T
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5.11. Collection of VAT on Imports
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6.3 Approval For Deferment Facility
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iv. If an importer declares only pa
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6.6 Deferment on Local Supplies (Te
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7.4 Tax Invoice Tax invoice should
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7.11 Use of tax fraction to compute
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Lower Rate - 10% Goods and services
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Chapter - 9 Calculation of Tax 9.1
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accounted for in respect of all the
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transferred to a taxable activity a
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Eg. If A is an ice-cream vendor who
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(3) In the above case if the regist
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• claim (deduct) only the allowab
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• “Value of Supply” has to be
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VAT chargeable = 900,000 x 20% = 18
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• The Director General of Customs
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10.5.6 Milk - item (iv) • Liquid
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(i) Insurance - xi(i) • Only the
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in Sri Lanka and consumed in Sri La
Page 76 and 77: Chapter - 11 Refunds 11.1 Unlike in
Page 78 and 79: 11.7 Set off of refunds against fut
Page 80 and 81: • To make an additional assessmen
Page 82 and 83: a genuine taxpayer who does not wis
Page 84 and 85: Penalties Tax payers should comply
Page 86 and 87: 15.3 Keeping of records regarding e
Page 88 and 89: 15.8 Example of a VAT Account VAT A
Page 90 and 91: the trading house or the other pers
Page 92 and 93: 16.4 Concessions available to Expor
Page 94 and 95: v. Importation of services are not
Page 96 and 97: Chapter - 17 Hire Purchase Transact
Page 98 and 99: (a) Under the existing provisions V
Page 100 and 101: y the hire-purchase company to the
Page 102 and 103: Chapter - 18 Leasing & VAT 18.1 Lea
Page 104 and 105: installments. Any VAT not recovered
Page 106 and 107: 18.13 Leasing inputs • Leasing in
Page 108 and 109: 18.15 Leasing Advance Sometimes it
Page 110 and 111: Thus output tax of B on the termina
Page 112 and 113: Chapter - 19 Mortgages 19.1 Mortgag
Page 114 and 115: • Services provided by internatio
Page 116 and 117: Chapter - 21 Some Obligations Under
Page 118 and 119: However an adjusted figure must be
Page 120 and 121: Chapter 23 Construction Contracts 2
Page 122 and 123: Government agencies mentioned above
Page 124 and 125: Chapter - 24 Rulings 24.1 Following
Page 128 and 129: which he has supplied to the garage
Page 130 and 131: instructions can be exempted if suc
Page 132 and 133: ii. iii. any other registration tha
Page 134 and 135: i. Membership fees and or subscript
Page 136 and 137: Chapter - 25 Zero Rated Supplies 25
Page 138 and 139: (ii) (iii) (iv) Services directly c
Page 140 and 141: Supply of facilities for crew chang
Page 142 and 143: 4. Yard to Port Transporting contai
Page 144 and 145: Chapter - 26 Travel Trade, Tourism
Page 146 and 147: ii. iii. But “travel insurance“
Page 148 and 149: 26.6 VAT ON MICE Tourism VAT rate a
Page 150 and 151: x. Supply of goods & vehicles free
Page 152 and 153: and for VAT purposes the two compon
Page 154 and 155: (i.e the lottery organizer) on whic
Page 156 and 157: The VAT charged on above should be
Page 158 and 159: 1.2.3 Other imported materials exce
Page 160 and 161: The sub-contract awarder should pay
Page 162 and 163: 2.3.1 Imported goods (except fabric
Page 164 and 165: 5.2.2 To BOI garment manufacturing
Page 166 and 167: Annexure - 2 First Schedule to the
Page 168 and 169: 4. Supply of any services to any Di
Page 170 and 171: Services 1. Electricity more than 3
Page 172 and 173: Sale before 01.08.2002 - GST Regime
Page 174 and 175: GST = (CIF + CD + Surcharge + Ex.Sp
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to indicate the date of payment of
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The period within which the Board o
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Mrs. S.N.P. Abrew - Senior Assessor
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VAT Guide to Value Added Tax - sri lanka inland revenue ...

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