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

claimed on expenses in connection with the services provided on such land and
building, during the tenancy agreement if such registered person provides
sufficient evidence to the satisfaction of the CGIR, to the effect that the
payments are made by him and the existence of the tenancy agreement.(Eg.
Telephone bills, electricity bills etc. paid by the tenant)
iv.
Electricity - any registered person who has obtained a license under the
Electricity Act No 19 of 1950 and engages in the distribution of electricity may be
allowed input tax on the purchase of electricity for such distribution without
apportioning for disallowable input.
iv.
Cash basis reporting - persons who are approved under Sec. 23 for cash basis
reporting of tax should declare input tax only when the payment is made in
respect of an invoice.
9.4.2 Disallowable input tax – Section 22 (5)
Input tax is relation to following supplies and invoices are not deductible
i. Motor vehicles used for traveling (business or private) including, repairs, lease,
hire, insurance etc.
ii. Purchase of goods or services which are not connected with the taxable activity.
iii. if the supply is not supported by a 'tax invoice' duly issued, and received within
12 months or a customs declaration issued in the name of the registered person.
(This does not mean that a tax invoice can be issued within 12 months. It should
be issued within 28 days. It is not valid if it is not issued within 28 days. In
cases where the “tax invoice” has to be sent by post ( Ex. Telephone bills) or due
to some extra-ordinary circumstances if it is received late anything received after
12 months will be disregarded). Further this 12 months rule have been slipped
out of the final draft/print of the Act. It is expected that it will be restored.
Taxpayers are advised to place the date stamp on the invoices received by post
and to prepare the VAT Account on the basis of that date. (Vide Para 15.6)
iv. if the input tax contained in a invoice relating to a local purchase is not claimed
within 6 months from the date of receipt of the invoice
v. Input tax in a tax-invoice which is not in the name of the Registered Person in
except cases referred to in para 9.4.1(iii) and in a Cus-Dec where change in
name is apparent.
vi. change in the use of assets and change in the status of the activity will give
rise to input tax adjustments. Eg: Machine purchase for exempt activity is
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