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

5.8 Payment of tax on Assessments
Tax payable on assessments made by an assessor (Vide Chapter 11 ) too is payable
immediately and the tax in default on such assessments too attract penalties as
mentioned above (para 5.4) and liable to recovery action by the C.G.I.R as stated in
(para 5.6) The VAT payable on assessments made shall be deemed to be in default from
the dates as explained below. Para 5.9(ii)
5.9 Recovery Action and VAT in default
In order to commence recovery proceedings as mentioned above in para 5.6, the VAT
payable should be deemed to be in default and the (Registered) Person concerned
must be deemed to be the defaulter. The circumstances in which VAT in default can
arise and a person can be a defaulter are as follows.
i. Situations where an issue of an assessment is not necessary Sec. 26(1)
When the VAT payable in respect of a taxable period is not paid on due date-i.e
within one month from the end of the taxable period:
This refers to all situations covered by Section 28(I)(a),(b) and (c) namely
(a) return not furnished, tax not paid
(b) return furnished but tax not paid or under paid,
(c) return is altered at the request of the registered person but tax not paid
then the tax payable shall be deemed to be in default irrespective of whether an
assessment is issued or not because issue of an assessment is not a condition
under Sec. 26(I). Thus a notice of default under Section44(I) can be issued
straightaway. (Question of quantifying the amount in default may arise in (a)
above).
ii.
Situations where an issue of an assessment, additional assessment or an
amended assessment is necessary.
(a) * Return not furnished-but tax paid – less than the amount payable
in the opinion of the assessor.
* Assessment should be issued on the difference Section 28(3)
* The difference shall be deemed to be in default with effect from
the date on which such tax ought to have been paid for that
taxable period – Section. 28(4)
* Therefore penalty will be calculated from the due date – i.e form
the last day of the month succeeding the last day of the taxable
period and not from the date of issue of assessment.
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