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

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4.13 Activity Code Number “Supplies” are categorized into several groups and each group is given a separate code number called the Activity Code. For example supply for goods by an importer without subjecting them to any processing is given the activity Code Number 6700. Supply of textiles is given the Activity Code Number 3210. When applying for registration for VAT the applicant must declare in cage No. 10 of the application (VAT 11) the relevant activity code number which is applicable to his taxable activity. The activity codes are enumerated in the guide given with the application. The classification of supplies into various activity codes is purely an exercise to facilitate computerization and extraction of statistics under predetermined headings . It does not entitle a registered person to apply the same rate of VAT to different supplies having the same activity code number. For example the supply of textiles and supply of yarn have the same activity code number. But they may be taxed at two different rates. 32
Chapter – 5 Collection, Payment and Recovery 5.1 Collection of VAT 5.1.1 VAT on local supplies • VAT on goods and services supplied in Sri Lanka is charged and collected, by the Registered Persons who make the supplies from the recipient of goods and services at the appropriate rates. • Every registered person should collect VAT on supplies made by him in Sri Lanka in the course of a taxable activity from the recipient of such supplies irrespective of the status of the recipient. Only exception is that they are not required to collect VAT when supplies are made to Diplomatic Missions and Diplomatic Personnel (Chapter 20) If the VAT is not collected from any taxable sales they are treated as tax inclusive sales and 1/6 of the total sales is treated as the VAT element in such sales. • Once a person is registered he should charge VAT on each taxable supply of goods and services made by him even if the total value of his taxable supplies fall below the taxable threshold. Eg. Mr. X who imports and sells motor spare parts is Registered for VAT. During the quarter ended 31.12.2002 he has sold only one item for Rs.2000/-. He has also taken spares worth Rs.6000/- for his personal use. (That means during this quarter his turnover is only 2000/- and value of taxable supplies is 8000/-). But he should charge VAT on each taxable supply Vat chargeable is 2000 @ 20% = 400 6000 @ 20% = 1200 He should declare 2000 + 6000 = 8000 as the total “value of supplies” in cage A of the return and 400 + 1200 = 1600 as the “output tax” in Box 1 of the return. 5.1.2 VAT on imports * VAT on importation of goods whether the importer is a registered person or not, and irrespective of the value of import, is subject to VAT and is collected by the Director General of Customs at the appropriate rates. (Unless the goods are exempt) • In determining the rate of VAT applicable to imported goods Customs will follow the H.S. Code. It is a classification of goods under various headings according to some nomenclature. The VAT rates applicable to those goods have been identified in consultation with the Inland Revenue. Please refer to “VAT Guide & P.R.O – 03/2002 dated 01.08.2002” issued by the Policy Planning and Research Division of Sri Lanka Customs. If there is any inaccuracy and or inadequacy in 33
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 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
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instructions can be exempted if suc
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ii. iii. any other registration tha
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i. Membership fees and or subscript
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Chapter - 25 Zero Rated Supplies 25
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(ii) (iii) (iv) Services directly c
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Supply of facilities for crew chang
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4. Yard to Port Transporting contai
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Chapter - 26 Travel Trade, Tourism
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ii. iii. But “travel insurance“
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26.6 VAT ON MICE Tourism VAT rate a
Page 150 and 151:
x. Supply of goods & vehicles free
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and for VAT purposes the two compon
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(i.e the lottery organizer) on whic
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The VAT charged on above should be
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1.2.3 Other imported materials exce
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The sub-contract awarder should pay
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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
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4. Supply of any services to any Di
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Services 1. Electricity more than 3
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Sale before 01.08.2002 - GST Regime
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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
Page 182:
182
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VAT Guide to Value Added Tax - sri lanka inland revenue ...

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