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

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• 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 68
• prescribed project related articles • Only if they make exempt supplies after the completion of the project. • Until the completion of the project or till 31.07.2004 whichever is earlier. ii. All undertakings approved prior to 16.05.1996 and undertakings with project cost exceeding Rs. 500 Million and approved prior to 01.04.1998 - are also still entitled to the exemption from VAT on the import of project related articles during the project implementation period or until the completion of the project whichever is earlier if such undertakings have not yet reached these dates. 10.5 Following clarifications may be noted with regard to exemptions provided in the first schedule. 10.5.1 Unprocessed Agricultural Produce – item (i)(a) • Live trees, and other plants, roots, branches, leaves, flowers, tubes, seeds, fruits and nuts of trees and other plants in natural form not otherwise processed. • Coconut shells and pairings can be considered as unprocessed for the purpose of exemption but charcoal is not. • Vegetables, lac, gums, resins and other vegetable saps and extracts. • Straws, husks, shells, skins of trees and other plants in raw form not chemically treated or otherwise processed; other than plants in natural form. • Any kind of semi processed rubber. 10.5.2 Unprocessed Horticultural Produce – Item (i)(b) Live trees and plants of a garden, branches, foliage, roots, flowers, nuts of trees and plants of a garden. 10.5.3 Unprocessed fishing products item (i)(d) • Fish & Prawns – Live, chilled or frozen • Skin, shells, bones and other parts • (Prawns include shrimps, crabs and lobsters) 10.5.4 Unprocessed Timber products – item (i)(e) Fuel wood, wood in logs, poles, sticks, particles, billets, piles, stakes or similar form in rough but not chemically treated /or not suitable for manufacture of an article. 10.5.5 Bread – item (iii) Any bread product is exempted but stuffed or filled bread and buns are not. Serving bread in a hotel/restaurant is also not exempted. 69
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But for the best to the September 0
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Preface The Value Added Tax Act was
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Chapter - 1 Introduction 1.1 Purpos
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However from the point of view of t
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The following test which has been a
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iv. Import of any fabric, yarn, gre
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Chapter - 3 The definitions of conc
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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 32 and 33: 4.13 Activity Code Number “Suppli
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 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
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However an adjusted figure must be
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Chapter 23 Construction Contracts 2
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Government agencies mentioned above
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Chapter - 24 Rulings 24.1 Following
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• None of the companies covered b
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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
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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
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5.2.2 To BOI garment manufacturing
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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
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