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

• The Director General of Customs and the CGIR have no authority to exempt
other goods, categorised under other H.S. Codes, on the basis of
recommendations made by other Ministries/Authorities. There is provision under
the Customs Ordinance to exempt certain goods from Customs Duty on the basis
of such recommendations, but the VAT Act No. 14 of 2002 does not permit such
an action. However as stated in para 5.1.2 there may be certain
inaccuracies/inadequacies in the H.S. classification and if it becomes necessary
to identify a certain imported item, recommendations may be obtained form
appropriate authorities for the purpose of identification. For example raw
materials used in pharmaceutical, Ayurvedic and other preparations are exempt
from VAT but in order to identify these raw materials recommendations from
Health Authorities are obtained. Similarly medical and surgical instruments, their
accessories and laboratory reagents are exempt. But the individual names of
some of these items may not appear at all in the H.S. Guide and some may
appear under inappropriate headings. In such situations if the CGIR is satisfied,
on the basis of such recommendations or on the basis of materials produced
before him, that the item imported is a medical or surgical instrument or an
accessory or a laboratory reagent as the case may be then exemption will be
granted. But, as stated earlier in para 5.1.2 such recommendations will be
solely for the purpose of identifying the goods only. For example laboratory
equipments are not specifically exempted in the VAT Act. Thus unless such an
equipment can also be described as a medical or surgical instrument, no
recommendations will be entertained to exempt it simply because it is used in
Hospitals. Further simply because laboratory reagents are exempted laboratory
equipments cannot be exempted, as it is not provided in the VAT Act.
• Minister of Finance can exempt from VAT on the import of certain goods, by
approved organizations if the goods are received as gifts or the supply is directly
funded by foreign organizations for the relief of distress caused by natural
disasters etc. (Item xvi of Schedule 1)
• Import of personal items and samples worth Rs. 10,000/- or less in relation to
business by parcel post or courier is also exempt from VAT. This is in addition to
the VAT Exemption on personal goods which are qualified under Passenger
Baggage (exemption) Regulations for Customs Duty purposes.(Items xxxii and
xv)
10.4 Imports – Exemption of BOI Undertakings – Item xx
i. Undertaking approved after 01.04.1998
Exemption is available on
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