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

Lower Rate – 10%
Goods and services referred to in 2 nd schedule to the Act are taxed at the Lower rate of
10%. When the rate is 10% the tax fraction is 1/11. That means the tax content in a
Normal Invoice (i.e tax inclusive invoice) is 1/11 of the total consideration including tax.
Standard Rate – 20%
Goods and Services other than
• Exempt goods and Services (Schedule 1)
• Lower (10%) rated goods and services (Schedule 2)
• Zero (0%) rated goods and services (Chapter 25)
Are taxed at 20% (when the rate is 20% tax fraction is 1/6)
Special Rate
Each piece of garment supplied to the local market by a B.O.I. garment manufacture
cum exporter with the approval of DGC/BOI is taxed at 25/- per piece. This is
collected by the Customs/BOI from the buyer through a Cus-Dec.
N.B: If there are other local sales where Rs.25/- per piece is not charged by the
Customs/BOI such sales are liable at the normal rate of 20% on the value of supply on a
tax invoice issued by the supplier (BOI Company) . Such amount should be declared by
the supplier as his output tax.
8.4 Amendment to return
If a person wishes to amend a return which he has furnished earlier he should apply to
Deputy Commissioner (VAT Refunds) stating the reasons as to why the return should be
amended. If the reasons are acceptable necessary adjustment will be made in the
computer and a revised assessment will be issued.
8.5 Monthly Returns and Quarterly Returns
Please see para 3.6
8.6 Returns to be furnished by importers entitled to VAT deferment facility;
• Exporters who import goods for the purpose of manufacturer and re-export
• Persons approved under Sec. 22(7) who import project related goods
Who are entitled to VAT deferment facility (Para 6.2.1) and are required to furnish Form
20A together with VAT return (Form 20) – Para 6.5
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