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

More documents

Recommendations

Info

Chapter – 25 Zero Rated Supplies 25.1 Section 7 of the Act provides that certain “supplies” be zero- rated. Broadly these supplies can be categorized into two groups viz. i. Goods Export of goods by the supplier himself and (Please see para 16.1) ii. Services Services connected to exports, international transportation, property outside Sri Lanka and certain services consumed outside Sri Lanka. 25.2 When a supply is zero-rated no tax shall be charged on such supply but it is treated as a taxable supply in all other respects. That means input tax in relation to such supplies made by a registered person can be deducted from his output tax. If all his supplies are zero-rated then such persons out put tax is zero and input tax will be refunded. 25.3 Section 7(i)(b)(iv) provides that “the international transportation (including transshipment) of goods or passengers as are specified by the C.G.I.R by a Notification published in the Gazette will be zero-rated. In this connection the Services specified by the C.G.I.R are specified in gazette – extra ordinary NO.1201/9 of 11.09.2001. This is an important area in zero-rating. 25.4 International Transportation is defined in Sec. 80, to mean – any service directly related to the transportation of goods or passengers – (a) from a place in Sri Lanka to a place out side Sri Lanka; (b) from a place outside Sri Lanka to a place in Sri Lanka upto the point of landing unless such services are carried out under a specified carriage contract according to the Documents of Carriage issued by a freight forwarder who is registered with the Central Bank of Sri Lanka. (c) From a place outside Sri Lanka to another place outside Sri Lanka. • This excludes landing, delivery and other services in relation to imports. That means they are not zero-rated. • Exports:- Freight forwarding from a factory in Sri Lanka to a destination abroad will be zero-rated. Services obtained from others are not zero-rated. • Zero rating is available only to the international transporter who in fact undertakes to transport goods/passengers. Thus the charterer of a ship or aircraft for international transportation of goods or passengers will qualify for zerorating but not the owner of the ship or aircraft who hired it or supplied it to the charterer. 136
• Any other services including coastal and inland transportation services for a local customers will be liable to VAT. • Outbound travel being international transportation of passengers is zero-rated. But it is not applicble for commission received by the local agent. 25.5 Following general guide lines may be used in deciding to zero rate export of goods and supply of services under VAT Act. Sec.7(1)(a) Export of Goods – Submission of “export cusdec” is not sufficient. Goods should have been in fact loaded into the ship/air craft. Basic document is Boat Note(Please see para 16.1) Persons exporting only exempt goods too can register for VAT and come under zero-rating. Sec.7(1)(b)(i) Services directly connected with any movable/immovable property outside Sri Lanka - If the services are performed in Sri Lanka in relation to any property out of Sri Lanka such services are zero rated. (Eg. A lawyer’s report on land outside Sri Lanka, a valuation report on a property outside Sri Lanka, advertising and insurance services in relation to property outside Sri Lanka. maintenance via internet of software used overseas etc. being services directly connected with property situated outside Sri Lanka are zero-rated. However a business organization out side Sri Lanka will not fall under this and hence the management of such a business cannot be zero rated). Other examples are Eg. 1 – A Sri Lankan insurance company issuing insurance cover to client’s motor vehicle which is in India. The service of insuring is zero-rated because it is a service directly connected with immovable property outside Sri Lanka. Eg.2 – A Sri Lankan film (registered person) sells apartments in Australia on behalf of a client in Sri Lanka. The commission received is zero rated for the same reason as above i.e a service provided in Sri Lanka but directly connected with immovable property outside Sri Lanka. It must be noted that in this type of situations the contract to supply the services may have been concluded in Sri Lanka but yet the services are zero rated because the services are directly connected with property outside Sri Lanka. (Please se discussion in para 25.6) 137
Page 1 and 2:
But for the best to the September 0
Page 3:
Preface The Value Added Tax Act was
Page 6 and 7:
Chapter - 1 Introduction 1.1 Purpos
Page 8 and 9:
However from the point of view of t
Page 10 and 11:
The following test which has been a
Page 12 and 13:
iv. Import of any fabric, yarn, gre
Page 14 and 15:
Chapter - 3 The definitions of conc
Page 16 and 17:
Eg. 1 : If “A” wants to termina
Page 18 and 19:
c. Time of supply in relation to su
Page 20 and 21:
Thus, any trade, business, etc. are
Page 22 and 23:
a business in Sri Lanka and not to
Page 24 and 25:
When the recipient is not a registe
Page 26 and 27:
• There are two types of registra
Page 28 and 29:
(ii) continued without making an ap
Page 30 and 31:
(d) (e) (f) input credit has been c
Page 32 and 33:
4.13 Activity Code Number “Suppli
Page 34 and 35:
the H.S. classification it may be b
Page 36 and 37:
5.8 Payment of tax on Assessments T
Page 38 and 39:
5.11. Collection of VAT on Imports
Page 40 and 41:
6.3 Approval For Deferment Facility
Page 42 and 43:
iv. If an importer declares only pa
Page 44 and 45:
6.6 Deferment on Local Supplies (Te
Page 46 and 47:
7.4 Tax Invoice Tax invoice should
Page 48 and 49:
7.11 Use of tax fraction to compute
Page 50 and 51:
Lower Rate - 10% Goods and services
Page 52 and 53:
Chapter - 9 Calculation of Tax 9.1
Page 54 and 55:
accounted for in respect of all the
Page 56 and 57:
transferred to a taxable activity a
Page 58 and 59:
Eg. If A is an ice-cream vendor who
Page 60 and 61:
(3) In the above case if the regist
Page 62 and 63:
• claim (deduct) only the allowab
Page 64 and 65:
• “Value of Supply” has to be
Page 66 and 67:
VAT chargeable = 900,000 x 20% = 18
Page 68 and 69:
• The Director General of Customs
Page 70 and 71:
10.5.6 Milk - item (iv) • Liquid
Page 72 and 73:
(i) Insurance - xi(i) • Only the
Page 74 and 75:
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 126 and 127: • None of the companies covered b
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 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
Page 176 and 177: to indicate the date of payment of
Page 178 and 179: The period within which the Board o
Page 180 and 181: Mrs. S.N.P. Abrew - Senior Assessor
Page 182: 182
show all

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

Create successful ePaper yourself

Delete template?

Save as template?